About Car Insurance Deductibles

Knowing what function car insurance deductibles serve as part of your auto insurance policy is essential to getting the best value out of your policy. It has a direct effect on how much you pay per month for coverage, as well as what you'll pay in the event of an accident.

Meaning

A car insurance deductible is the price you pay out of pocket in the event of an auto accident. If your car needs $2000 of repairs and you have an insurance deductible of $500 then you'll pay $500 for repairs.

Benefits and drawbacks

The benefits of a high deductible is that you will lower your monthly auto insurance premium; but the drawbacks are that if you do get into an accident you may wind up paying more for repairs, especially if you are at fault. Lowering your deductible, on the other hand, means you'll pay less out of pocket in the event of an accident but you will pay more in insurance premiums per month.

Exceptions

If you are found to be not at fault for the accident and the other party can be made to pay (either through their insurance or their assets), then you will pay no deductible. At worst you'll have to wait until the other party is found liable in a court of law or backs down from a dispute, to get your full payment for repairs.