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Your deductible is one of the major factors that can impact your auto insurance costs and coverage options. Many consumers think that having a lower deductible is automatically better, but it often depends on the driver and vehicle. If you’re thinking about changing your policy, here are some important factors to consider.

Reasons to Raise Your Deductible

A high deductible lowers the amount of risk for an insurance company. Basically, if you file a claim, they’ll only have to pay if damages reach that deductible amount. For small incidents, you may not even file a claim with a high deductible, and in the instances where you do, they can deduct that high amount from their own expenses. This can mean higher costs for you if you cause an accident and have to file a claim for your own vehicle.

However, the lower risk for insurance companies means you’ll likely have to pay less out of pocket for your monthly premiums. Your provider can afford to charge you less overall because you’re taking away some of that risk from them. The exact savings vary by state and driving record, but this option is often cheaper overall.

Reasons to Keep It Low

auto insuranceA low deductible means more risk for your insurance provider but less for you. Because of that increased risk, this usually means that you’ll pay more in monthly premiums. However, if you get into an accident or experience damage and need to file a claim, you can count on more of the expenses being covered and paying less out of pocket.

Even if this option is sometimes more expensive overall, it gives drivers more predictability in their spending. Many prefer to make steady monthly payments instead of taking on the risk of having to make a large payment in the event of an incident. This can also help you get more out of your insurance policy, since you don’t need to reach a high payment amount before receiving compensation.

 

If you’re looking for a new auto insurance policy, contact Southern Insurance AL. The family-owned agency has been serving customers throughout the Foley area since 1988 with policies for vehicles, motorcycles, RVs, boats, ATVs, commercial vehicles, and renters. They provide hassle-free options and friendly service so you can make the best possible decision for your needs using clear information. Visit the company’s website to learn more about policy options. To get a free quote, call (251) 943-3340.

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