AUTO INSURANCE ARTICLE
What Is A Car Insurance Deductible?
By: BethAnnWhat about the premiums I paid?
That is to buy your insurance. You set the deductible when you get the policy; you are the driver in this sense as well. You will see the difference a deductible makes in your premium. The lower the car insurance deductible the higher the premium. It is fairly straightforward math. There are many factors that also go into premium calculation such as your age, driving record, type of car and more. Those factors are also what make insurance costs vary from consumer to consumer.
But why is there a deductible?
The why behind it has to do with the way claims are filed. Everyone would pay higher premiums if there were claims being filed all the time. By instituting a deductible and having you participate with money from your pocket, it helps control the claims being filed. Nuisance claims or questionable claims are reduced because there is a cost to the person filing. As a result only valid, necessary claims are filed and paid off by the companies. Your participation helps regulate how and why the claims are filed. So the primary reason you have a car insurance deductible is to help keep your insurance costs down.
Why do I have different car insurance deductible amounts?
Again, you select your deductible when you obtain your insurance. It is very common to have a different deductible for your liability insurance versus your comprehensive insurance. Liability insurance is what protects you when you do damage to someone else, their car or their property. Comprehensive insurance protects you when your vehicle is damaged. Two different sets of circumstance, which is why there are two different deductible amounts in your car insurance policy.
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