When you get a new car, there are many things to consider when it comes to auto insurance. However, different auto insurance plans can be confusing! Nicholas / Tobin and Associates are here to help. We want you to be well informed on what auto insurance plan is right for your car and your lifestyle. Here is a quick guide to understanding an auto insurance deductible:
Auto Insurance Deductible 101
Deductible only applies if you purchase collision and comprehensive coverage which is optional. It is important to review your coverage prior to submitting any claim. Once you know the cover you have in place you can assess what is the right deductible to fit my needs. What is a deductible and how does it work? To simplify the answer it is the amount of money you pay towards your car’s repairs after you have been in an accident of some sort. Your insurance company would then cover the rest. If you have damage on your car that will cost $7,000 to repair and you have a $1,000 deductible, you would pay the $1,000 and your insurance would pay the remaining balance of $6,000. And in the case where you are hit by another car, you may not be subject to any out of pocket expenses IF the other carrier takes responsibility for the accident and the repairs to your vehicle. Always, talk to your agent before reporting a claim and ask them for the best advice on how to proceed given the situation.
Best Course of Action
Many people think this means that it is best to keep a very low deductible. The less you pay in repairs, the better, right? Wrong! The lower your auto insurance deductible is, the more you will have to pay per month. And sometimes just because you have coverage in place does not mean you should submit the claim. Assess the situation review how much insurance money will you get back? When was your last claim? Is it worth submitting the claim if you have had one or two recent ones in the past several years?
In the case where you may have a small insurance recovery you want to best understand what will happen to my future insurance costs if you submit the claim. Many times it is not a matter of the carrier increasing your insurance after a claim, but that simple fact that they took away your loss free discount.
Many Factors to Consider
There are many factors in determining the correct auto insurance deductible for each person and family. Income, budget, savings, and credit will all come into account. In fact in a lease or with an auto loan you need to check with your lender as they may have strict limitations on what deductible you need to have. Either way you can choose two different routes. You can take more financial risk with high deductibles and lower your monthly costs, or you can choose low deductibles and higher monthly costs but more peace of mind in case of an accident.
Auto insurance deductibles can be difficult to choose from. To figure out which policy is best for you, why not contact Nicholas / Tobin Insurance? We are proud to offer automotive insurance to the New Milford and Kent areas. For more information on our auto insurance coverage, click here or call us today at 860.354.4466!