The Benefits of Opting For a Higher Car Insurance Deductible

Updated on Jun 1, 2022 · 2 min read

Striking a balance with your car insurance deductible
The other side of the coin

You did your homework and found a good,

policy. So why are your rates increasing? There are many factors that affect insurance prices, but one thing you might’ve missed is the impact of your

car insurance deductible

A deductible is the set amount of money you pay for a claim you make through your insurance. When you buy your car insurance policy, you decide which deductible you’re willing to pay. The higher the deductible, the lower your premiums will be.

When choosing a deductible, you need to consider what you can afford in the event of an accident. But choosing a deductible that’s too low can also have adverse consequences.

Striking a balance with your car insurance deductible

Insurance premiums are not fixed.

Your driving record

and

the number of claims

you make affect the rate you pay. If your deductible is too low, your higher premiums might tempt you into making small claims you could’ve paid out of your pocket.

Over time, this could lead to you losing more money than you saved in the short term. It could also lead to you being labelled as an expensive insuree within the industry–a reputation that will cost you for years to come.

Having a higher deductible could discourage you from making this mistake, according to

Clark.com

. The low premiums that are matched with a high deductible will also leave you with the cash to pay for minor damages so you can avoid involving your insurer.

The other side of the coin

MORE:

A Shady Car Insurance Fraud Ring Might Have Just Been Busted

While a higher deductible will keep your insurance costs down, it’s important to choose one you know you’ll be able to afford. Remember, there’s a risk in choosing a high deductible. If the unexpected happens and you need to make a large claim, you’ll need to pay that deductible right away.

Whatever rate you decide to buy, set the sum of the deductible aside in a savings account you can easily retrieve. That way, you can rest easy knowing you are prepared for any trouble that comes your way.

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Written By

Andrew Koole

Andrew is a freelance writer. His first car was an AMC Spirit, and he enjoyed driving other "character cars" in his early twenties, like his rust-red '84 Volkswagon Rabbit and his '86 banana-yellow Volvo 240. Since then, he's moved on to the more reliable models. He writes copy and content for a number of clients while also pursuing his creative writing in poetry and fiction. Before diving into his dream career as a wordsmith, he worked as a disability support worker and musician.