There are many important decisions to make when shopping for auto insurance, including how much your deductible should be. This is the amount you’ll have to pay if you file a claim before your insurance kicks in. Deductibles allow you to share the risk of loss with your insurer. Therefore, the more risk you’re willing to take on by choosing a higher deductible, the lower your premium will be. While this may sound like a great way to save money now, it could place a financial burden on you in the future. So you should take the following factors into account to help ensure you set the right deductible for your situation and find the right balance.

What to Consider When Choosing Your Auto Insurance Deductible 

How Much You Can Afford 

The decision to increase your policy deductible must be balanced with the cash flow you have available and your ability to pay more upfront if you experience a covered loss. Evaluate your savings and make sure you have the funds to pay a higher deductible, then make it a point to set that amount aside as though it’s already spoken for. If you would have to borrow money or use a credit card to cover it, the lower deductible is likely the best choice.  

The Difference in Premium Costs 

Ask your agent to run numbers so you can get an accurate idea of what your auto insurance would cost if you set the highest deductible versus the lowest one. Compare the monthly premiums to see exactly how much you would save if you chose the higher amount. If it will take more than three years for you to save the same amount as your deductible, the less expensive option is probably better.

The Value of Your Vehicle 

You also need to factor in how much your vehicle is worth. A more expensive car will cost more to insure, so there’s a good chance that setting a higher deductible will yield greater savings. If your car doesn’t hold much value, carrying a lower deductible usually make more sense since the cost to repair it may only be slightly more than the deductible. 

Your Level of Risk 

Analyzing your likelihood of getting into an accident can help you assess the right deductible as well. Consider your driving record and habits, including how much you drive, your tendency to get easily distracted, and whether you frequent areas that are prone to criminal activity. If your chance of filing a claim is high, a low deductible might be most appropriate. 

Whether you’re purchasing a new auto insurance policy or renewing an existing one, the professionals at Tammy Ross Insurance can help explore your deductible options. They offer more than two decades of industry experience and have earned a solid reputation for providing residents across Union County, NC, with high-quality coverage solutions. As an independent agency, they are able to access products from a variety of reliable carriers and find you the best rates possible. Call (704) 233-4981 to schedule an appointment or visit them online to request a free quote.