You Will Regret This Common Car Insurance Mistake
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Buying car insurance requires a lot of decision-making. You have to choose between providers, packages, liability levels, and discount options. Many of these decisions are a matter of personal preference, but one that people often get wrong is where to set their deductibles.
Setting your deductibles high for a low monthly fee can be tempting while looking at the numbers. Paying less each month might seem advantageous, but when you’re forced to make a claim, tipping the scales too far could be disastrous.
Make sure to choose the right car insurance deductible.
First off, what’s a deductible?
A deductible is the set amount of money you pay when you make a claim through your insurance. When you buy your car insurance policy, you decide what deductible you’re willing to pay. The higher the deductible, the lower your premiums will be.
To give an example, say you choose a policy with a $500 deductible. Your insurance premiums might be something like $130 per month. If you have an accident and the repairs cost $2,000, you’ll pay your $500, and your insurance provider will cover the rest.
If you choose a policy with a higher deductible, say $1,000, your monthly payment will drop significantly—probably to about $90 per month—but your cost out of pocket will double in the event of an accident.
Things to consider when choosing a deductible
Setting your deductible is all about balance. You want it to be high enough that your monthly bill won’t be too hard on your finances. But you also need to make sure you can access the lump sum in the case of a car accident.
Nasdaq suggests creating an emergency fund to cover your deductible if you can. That way, your deductible won’t loom over your head as you go about life and driving.
Having a stash designated for this specific purpose will also help to take the guessing game out of setting your deductible. The more you can set aside, the higher the deductible you can afford and the less you’ll have to pay every month.
Other ways to save on car insurance
Choosing a high deductible is a gamble. If you can avoid having car accidents, it can save you money. But we all know that some accidents are unpreventable, and there are easier, safer, less stressful ways to save on car insurance.
If you want to save money on car insurance, Jerry is a good place to start. A licensed broker, Jerry does all the hard work of finding the cheapest quotes from the top name-brand insurance companies and buying new car insurance. Jerry will even cancel your old policy for you.
And to ensure you always have the lowest rate, Jerry will send you new quotes every time your policy comes up for renewal, so you’re always getting the coverage you want at the best price. This level of service is why Jerry earned a 4.6/5 rating on the App Store and made it the top insurance app in the country.