When you choose insurance coverage, you are often given a choice and asked to select a deductible amount. Depending on your situation, a high or low deductible can be best for you. Wilson Insurance, a highly regarded local insurance agency in Dalton, GA, explains what a deductible is and what amount is right for you. 

What Is a Deductible?

A deductible is the amount you must pay before your insurance policy kicks in toward a claim. For instance, if your auto insurance policy has a deductible of $1,000 and you are in a collision that costs $5,000 to repair, you pay the first $1,000, and your insurance company pays the remaining $4,000. However, if the damage costs only $700 to repair, you pay the entire amount. Deductibles prevent insurance companies from being inundated with small claims and reduce the likelihood of intentional or easily preventable losses. This helps keep insurance coverage affordable.

When Should You Choose a High Deductible?

Because you agree to pay more of the potential repair costs, a higher deductible reduces your premium, the amount you must pay each month or year to maintain insurance coverage. Deductibles come into play for auto insurance, health insurance, and homeowners insurance, so if you are a safe driver, in good health, and live in a secure area, a higher deductible may save you money. However, this means you will have to foot more of the bill if the unexpected happens.

When Should You Choose a Low Deductible?

Lower deductibles raise your monthly or yearly premium since the insurance company agrees to cover more of potential repair costs. Lower deductibles offer the most protection should disaster strike. If you can afford to pay the extra premium amount and don't want to gamble on the unexpected, consider a lower deductible amount. It costs more, but it provides the greatest amount of coverage and peace of mind.  

Wilson Insurance, Dalton, GA's most respected local insurance agency, can help you design the ideal insurance coverage for your business or family. Visit them online to get a quote, or call (706) 278-0549 to discuss your insurance needs with their team.