Many people don't understand the importance of deductibles. So, I am going to see if I can clarify it for you. The question that I get almost every day is "Will my rates be cheaper if I have a lower deductible?" Well, the answer is "Yes," but it is so much more than just have cheaper rates. When I think about deductibles, I look at it like a pay now or pay later situation. Before I get into all of that, let me slow down for a minutes and explain your deductible's purpose.
Deductibles, represent the amount you will pay to go towards any repairs for your vehicle if it has been involved in an accident. I can already hear the keys clicking from you typing in the comment section, "But I'm a good driver. I've never had an accident." That's good. That's actually better than good. It's amazing. BUT...when I say accident we are not just talking about at fault accidents. I am talking about comprehensive losses and not at fault accidents as well as uninsured motorist property damage claims.
For example, let's say you have an $1,000 deductible. Sure, that deductibles makes your insurance premium a little less expensive, BUT, and this is a BIG BUT, you would have to pay $1,000 towards the repairs of your vehicle if you were to hit a deer of even if your vehicles was vandalized or damaged in a hurricane or tornado. None of these things are your fault. None of these happened because you are a bad driver, BUT because you choose a $1,000 deductible, you will be responsible for the first $1,000 of the repairs. If that deer caused $900 worth of damage, your insurance company would not have to pay anything towards your repairs, because the cost of the repairs is below your deductible. Same scenario but instead of a $1,000 deductible, you have chose to carry a $250 deductible. If there that deer caused $900 worth of damage, you would only be responsible for the first $250 of the repairs and your insurance company would be responsible for the other $650. I really hope you were able to follow me there.
We can never predict the future or if we will be involved in an accident, but we can educate ourselves and make choices that will enable us to be better prepared if an unfortunate event does occur. It's better to have it and not need it than to need it and not have it. If you have any questions or need to insure your vehicle with, please contact us here and Budget Insurance Agency. We would love to help you with your insurance needs.