Choosing the Right Deductible

When you purchase insurance, deciding which deductible is right for you is one of the many decisions you'll need to make. Doing some homework on the subject can save you money in the long run.

Doing Your Homework
Most insurance policies are written subject to a policy deductible. The deductible is the amount you have to pay towards the covered loss before your insurance company's payment kicks in.

Auto insurance policies normally have separate deductibles for collision and comprehensive losses (the latter includes wind, hail, or theft losses). Those deductibles are typically a flat dollar amount, ranging from $100 up to $1000 or more. In some cases you can choose a policy with no deductible at all.

For the most part, the days of $50 and $100 deductibles are long gone. This is in large part due to inflation and the higher cost of property, including automobiles. Costs are now as much as ten times higher than when those deductibles were first available.

Choosing a Deductible
Usually, if you select a larger deductible, your insurance rate will be lower, and vice versa. Make sure to consider your circumstances when selecting a deductible amount. Should you end up facing a high-dollar loss, you should be able to afford the deductible.

The main reason you purchase insurance protection is to protect you and your family from the financial hardship that can result from a major loss. If you are willing to self-insure the small losses and pay for a small part of the larger ones, the savings in your premium could be significant. If you invest in the proper maintenance of your property, you even may avoid many of the smaller losses that tend to happen. Make that your first level of insurance coverage and your savings will be even greater.

Have more questions on how to choose the right deductible for you? Contact a local Shelter Insurance® agent.