Insurance education can be a very good thing. Everyone has to buy insurance but not everything is always clear. The goal of this series of posts will be to make better educated insureds. So that you know what you’re getting when you buy it!
What is a deductible? That’s a fantastic question because the deductible you choose will directly affect the premium on your policy. By definition, a deductible is the amount of money you agree to pay out of pocket for certain kinds of claims. The insurance company takes care of the rest. Deductibles can range anywhere between $250 all the way up to $2000. As a rule the higher the deductible the lower the premium on the policy.
Let’s say that Lucy was in an accident that caused $6,000 in damage to her car. Her deductible was $500 at the time. Lucy had to pay $500 towards repairs and the insurance company paid the remaining $5,500. That applies to however much damage the vehicle suffered. The repair bill could have been $10,000 and Lucy would only have had to pay $500.
Savings are important but it’s equally important to choose a deductible that you can afford. Remember, if you ever have any doubts or questions then feel free to call us!