Deductibles Explained

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Deductibles Explained

via FIQ Car Blog by Mitch on 11/9/11

With any auto insurance policy you obtain, you should have the deductibles explained by the insurance agent. Understanding how your deductible plan is designed can save you money when it is time to pay those premiums. Choosing the right amount for your deductible will also save you frustration and worry in the event your car ever needs to be repaired.
Although the subject of automobile deductibles is not overly complicated, there are some facts that everyone should know.
A deductible is an amount of money that you agree to be responsible for in the event of any accident involving damage to your car. If an accident were the fault of another driver then his insurance company would be responsible for the repair costs. However if no one is at fault or you are found liable, then your auto insurance would have to pay the repair bill. According to your policy, the insurer will pay for the damages that exceed the chosen deductible.
As a driver, you are considered to be a financial risk, no matter how spotless your driving record may be. Thus the insurers are going to help reduce the risk they are taking by giving you the opportunity to shoulder a little of the risk yourself. With a deductible, you are agreeing that you will be financially responsible for a portion of any future damage to your car when no one else is judged to be at fault.
There are some plans that involve zero deductibles and these will also be your most expensive options. In these instances the insurance company would pay all of the expenses resulting from damages to your car. Other deductible amounts can also be selected. The larger the deductible the lower your annual premium would be.
Having the facts about deductibles explained in detail gives you the opportunity to ask specific questions. You need to understand exactly how this insurance technicality operates if you want to get the best auto insurance coverage for the best price.

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