The state of Ohio requires its drivers maintain a minimum amount of auto insurance coverage ($25,000 bodily injury coverage per person, to a max of $50,000 per accident, and $25,000 property damage coverage per incident). When buying coverage, varying your car insurance policy's deductible can alter the premium amount you must pay each year. Somers Agency,  the premier business, homeowners, umbrella, and auto insurance agency in Lorain County, OH, explains below what an insurance deductible is and how it affects your car insurance rates.

What Is An Insurance Deductible?

The deductible amount is the amount of money you must pay for repairs to your vehicle, to another motorist's vehicle, or for other property damage after an automobile accident before the auto insurance company must contribute. For instance, if your vehicle requires $2,000 worth of repairs and your deductible is $200, you must pay $200 for the repairs, and your car insurance company pays the remaining $1,800. However, if your deductible is $1,000 and repairs are only $900, you pay the entire amount, and your auto insurance company needs not pay a cent.

How Does The Deductible Affect Your Premium Rates?

As you can see from the above examples, higher deductible amounts mean you pay more out of pocket after an accident—and in some cases—the insurance company ends up paying nothing. Therefore, higher deductibles reduce your yearly premium considerably; in some cases, you can lower it by as much as 20 percent. The deductibles you can choose from typically fall within a range of dollar amounts, such as $250, $500, $1,000, and $1,500. The larger the deductible amount, the lower your yearly premium costs will be. Weigh the costs of paying more up front vs. more post-accident, and choose based on your current finances, driving confidence, and past driving record.

Somers Agency offers invaluable advice and guidance when you're designing a car insurance policy. They explain how various deductibles affect your policy premium and help you decide how much coverage you need. Visit their website for location and contact details, or call (440) 324-3447 to discuss car insurance quotes with a friendly, knowledgeable professional.