What is comprehensive and Collision and why do we need deductibles. Many Americans every day are in search for Auto Insurance. Auto Insurance has many terms and definitions that sometimes we don’t know very well. Today let’s look over “Deductibles”. You have to pay your deductible with most claims, no matter how many you have per year or the lifetime of your policy. Also, usually your insurer only pays for damages above your deductible. For example: If you have $300 in damages and a $500 deductible, you’d pay all of the repair costs. Also, if you total your car your insurer will give you a payment for its current value, minus your deductible.


When you have to pay your deductible

Your deductible only applies to damages to your car rather than to someone else’s. The general rule is if your insurance company pays for your repairs, then you pay your deductible. When they pay, you pay.


When you don’t have to pay your deductible

There are a couple common outliers:

Another driver hits you

If the other driver is officially deemed at fault, their insurance company should pay for your repairs, and you won’t have to pay your deductible. There are some situations in which both drivers are at fault. In those cases, you may end up paying a portion of your deductible.

If you’re financing your car, your lender may require you to get repairs.


How your deductible impacts your price

A higher deductible means a lower rate (and vice versa). For example: Let’s say that collision coverage costs $250 for a six-month policy with a $100 deductible. Increasing the deductible from $500 to $1,000 is the biggest jump in savings. But, going from $1,000 to $2,000 is almost meaningless.


How to choose the right deductible

Deductible amounts can typically range anywhere from $100-$2,000. The most common deductible our drivers choose is $500.

  1. Do you want to pay less for car insurance or repairs?

We’ll supply the facts, but it’s really all about what you want:

Higher deductible = Lower car insurance rate and higher out of pocket costs
Lower deductible = Higher car insurance rate and lower out of pocket costs

  1. How much can you afford to pay out of pocket?

Your deductible should never be higher than that number. If you have an accident, your deductible is how much you’ll likely have to pay.

  1. How likely are you to have an accident or claim?

Betting against having an accident is always a gamble. Data shows that 17% of customers with comprehensive/collision have a claim in a given year that would require them to pay some or all of their deductible. FYI: Comprehensive and collision are the most common coverages that include deductibles. If you’ve had accidents in the past and you typically drive a lot on busier roads, you may be even more likely to have an accident.

Here at Capital Insurance Service we are all trained agents that are able to explain these coverages a little better!

Call, Click or stop by today.