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A good deductible for auto insurance is an amount you can afford after an accident or unexpected event, although most drivers pick an average deductible of $500. Other common auto insurance deductibles are $250 and $1,000, but drivers should take several factors into account before deciding which one is right for them. These include what premium they can afford and how likely they are to file a claim.
Since policies with a lower deductible cost more, it can be tempting to choose a high deductible. But your deductible shouldn’t be more than you can comfortably afford to pay out of pocket if your car is damaged. If your deductible is too high, you could be putting yourself in a difficult financial position down the road.
You can choose different deductibles for separate types of coverage, so you should consider how likely you are to file each type of claim. For example, if you live in an area that is prone to natural disasters, consider getting a comprehensive insurance policy with a low deductible. Similarly, if you’ve never had an accident and you live in a low-traffic area, consider choosing a high-deductible for your collision insurance policy.
Every driver’s financial situation is different, so there is no such thing as a one-size-fits-all deductible. To learn more, check out WalletHub’s guide to car insurance deductibles.
People also ask
What does it mean when you have a $1,000 deductible?
A $1,000 car insurance deductible means you must pay $1,000 out of pocket before your insurance company covers your claim. In most cases, the insurance company will pay the claim amount directly to you or to a third party, such as a mechanic, excluding the $1,000 deductible.
$1,000 Deductible in Car Insurance
Having a $1,000 deductible on your car insurance means you need pay this amount yourself when filing either a collision or...
read full answer by WalletHub, Financial CompanyIs a $500 or $1,000 deductible better?
A $1,000 deductible is better than a $500 deductible because a higher deductible usually lowers your monthly insurance premiums, saving you money if you're a safe driver. Switching from a $500 deductible to a $1,000 deductible could save you roughly 28 percent on your insurance premiums.
How to Choose Between a $500 and a $1,000 Deductible
Figure out how much you could save on your premium with a $1,000 deductible.
Determine if...
read full answer by McKayla Girardin, Car Insurance WriterDid we answer your question?
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