How Much Can You Save By Raising Your Deductible?
Many people become frustrated with car insurance deductibles. Some wonder about the value of having auto insurance if they must pay out of pocket for coverage anyway.
The key here is to know that a deductible is one of the factors on your policy that you have full control over. You can generally adjust it upward and downward as needed. And you can also save money on your premium by having a higher deductible.
Key Cost Savings: What to Expect
Car insurance deductibles typically range from $250 to $2,500. By some estimates, raising your deductible from $250 up to the highest amount allowed may cut your actual out-of-pocket costs in half. However, there are limitations here. And, what works for some may not work for others.
The biggest concern with raising a car insurance deductible is paying for claims. Let’s say an accident causes $10,000 worth of damage to your vehicle. If your deductible is $2,500, you must pay that $2,500 out of pocket. Do you have that amount of money on hand all of the time to cover these potential costs? If the answer is no, it doesn’t make sense to raise your deductible to that level.
How Much Can You Save?
It is a good idea to pay close attention to your existing auto insurance policy. If you can afford to pay $500 out of pocket, raising your deductible to that level may cut your costs. Choose a value that is as high as you feel comfortable paying at any given time. Then, be sure to tuck that amount of money away in a separate account. That way, the money is available should a claim happen.
To determine how much you can save, request a few quotes from your car insurance provider. Keep the coverage type the same. Then, adjust the deductible up or down. Determine which level offers you the most savings for the risk you take on. Insurers will often offer different rates, so be sure to choose policies that offer you the savings you need.
Deductibles help defray some of the cost of auto insurance, but not all of it. You can also work with your car insurance agency to find other options for saving money. Chances are good you will find a few discounts and rewards to help keep your premiums down.
Do you need coverage? We can help. Call Cloverleaf Insurance at (800) 530-5822 for an instant auto insurance quote right now!