Chances are, if you are reading this blog post, you are currently shopping for auto insurance. If that is the case, take a deep breath, it’s not as complicated as it probably seems right now.
What is a deductible?
One of the critical components of any insurance policy is usually the deductible and often ranged from $100 to $2000 depending on your policy. In short, the deductible is the amount that you must pay before the insurance kicks in and covers the rest of the bill. Think of it like a child wanting a new lego set, where the parents say, “if you save up $10, we will pay for the rest”. It will be a set dollar amount for almost all insurance policies instead of a percentage of the total bill. The parents aren’t saying, “you pay 10%, we’ll pay the rest”; it’s a set $10 requirement regardless of the lego set’s cost. Note: If I were the kid in this analogy, I would most definitely be buying the 4784 piece Star Destroyer.
How big should my deductible be?
While a $100 deductible may sound fantastic, you will undoubtedly feel that on the back end when paying your monthly bill. Increasing your deductible to say $500 or $1000 will decrease your monthly premium and have you on the hook for more upfront if an incident does occur. There is no ‘one-size-fits-all’ for insurance policies and deductibles, so it is best to have a conversation with your insurance agent to determine what is best for you.
Want help deciding whether to make a claim? Try out our Claim Calculator to get a recommendation.
Are there exceptions to paying my deductible?
Depending on your insurance company and policy, you may have the option to include additional endorsements or waivers for specific components of your vehicle. Essentially, this is an add-on to your policy that waives your deductible in the event damage occurs. By far, the most common occurrence of this is an auto glass endorsement. This is optional for insurance companies to offer in most states. However, Arizona is one of the few states that require companies to provide this.