When you own a car, it is a legal requirement to have auto insurance. However, that doesn’t mean that the policy should always stay the same. There may be times when it makes sense to raise your deductible. As a responsible car owner, you should know when to change the policy to match your needs, and when you should leave it as is. Below is more information about how to decide on when your deductible needs an adjustment.

When to Raise It

A deductible is the money you pay to fix or replace a vehicle after theft or an accident. Depending on your policy, the deductible can range from $250 to $1,000, and sometimes even higher. After you meet this threshold, the auto insurance company will take over payments. A low deductible puts the provider at a higher financial risk, so they will compensate by raising your monthly rates.

The premium depends on several factors, including the worth of your car and the statistical odds that something will happen to it. By raising the deductible, you’re promising to cover more of the costs before the insurance company takes care of the rest, meaning the company risks less. In response, they may decrease your rates.

Raising your deductible is beneficial if your vehicle is a recent model in excellent condition and you perform regular maintenance. This is also a safe choice if the car remains in a garage or you have a savings fund that can cover the deductible.

Under these circumstances, there’s a lower chance that your vehicle will experience damage or that you cannot pay the deductible. Raising this amount would allow you to save money on monthly payments.

When to Keep It Low

If you do not meet most of the criteria above, you likely should not raise your deductible. This is because you’ll need the insurance company’s help to cover the costs of theft or damage.

However, you should also account for the auto insurance laws of your state. For example, Tennessee residents should note that raising their deductibles tends to save a marginal amount of money when compared to those who live in other states. If raising your deductible won’t let you pay significantly less, then you may prefer to keep it low. That way, you put yourself at less risk of financial trouble if you must fix or replace the vehicle.

For professional guidance in exploring deductible options for your auto insurance, contact Lafever Insurance Agency in Cookeville, TN. They have been serving the Upper Cumberland since 1978, and have decades of experience in determining car insurance rates and policies that make sense for each individual. They can also help with mobile home and motorcycle insurance. Call (931) 526-3377 to receive an estimate for your car. Visit them online for more information about their services.