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What's the best way to choose a deductible for car insurance?
I am buying a new car and my lender says I need full coverage. My car insurance is giving me an option for deductibles. How do I choose what's best?
Emily Maracle · Updated on
Reviewed by Shannon Martin, Licensed Insurance Agent.
“
Choosing a deductible
can seem overwhelming due to the number of options you have. But looking at your financial situation can help determine what’s best for you.Since deductibles for
comprehensive coverage
and collision coverage
are the amount you pay out of pocket after a claim, choose something that you can afford.Deductibles typically range from $0 to $2,500. The most common option for deductibles is either $500 or $1,000 since this is an amount most feel comfortable paying out of pocket.
Insurance companies pay claims out of a premium pool for policyholders. So, they need to ensure they have enough to cover all claims. If they need to pay more after an accident because of a lower deductible, they need to charge more to offset it.
If you choose a lower deductible amount, you won’t have to pay as much out of pocket after an accident, but you will pay more for your monthly premium. Similarly, if you have a higher deductible amount, you’ll pay less.
If you have a set monthly price or a general idea of what you can spend, this can help you budget when you shop around. Insurance companies give you the ability to request car insurance quotes online and alter your coverage. You can look at several companies with various deductibles.
If you need help finding a customized car insurance policy, go to
Jerry
. Jerry gathers quotes for the coverage you need from up to 50 top insurance providers.”View full answer
- Gregory R.
WHY YOU CAN TRUST JERRY
Jerry partners with more than 50 insurance companies, but our content is independently researched, written, and fact-checked by our team of editors and agents. We aren’t paid for reviews or other content.
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