A deductible is a set amount you have to pay out of pocket on a claim before your insurance kicks in and covers the rest. Most San Diego car insurance policies involve a deductible. Make sure you understand the basics of how they work so you’re prepared in the event of an accident.
1. They Don’t Apply to All Policies
Nearly every state requires drivers to carry liability insurance, which pays for damage you cause to others in an accident. There is no deductible for liability-related claims. If you carry comprehensive and collision, which are optional forms of coverage to cover your car, you will have a deductible.
2. The Higher the Deductible, the Lower Your Premium
A deductible is a form of risk sharing, and the more risk you take on, the lower your monthly premium will be. If you have a $500 deductible, you will pay more in premiums than if you have a $1,000 deductible. However, a higher deductible also means you will face more financial risk if you have a claim.
3. Auto Deductibles Are Per-Claim, Not Cumulative
The deductible for your auto insurance policy works much like deductibles for homeowners and renters insurance because it applies to every individual claim. For instance, if your deductible is $500 and you have two $1,000 claims in a year, you will pay $500 toward each claim. Auto deductibles are not cumulative like the deductibles in health insurance San Diego residents may be accustomed to.
4. Policies Sometimes Have Exceptions
Though your deductible usually applies anytime someone else’s insurance isn’t paying for damage, many policies have exceptions. For example, most auto insurance policies exempt glass coverage from the deductible. This is because cracks or chips in a windshield usually cost less to fix than the deductible covers. As a result, people may not pay to repair them, which can cause a safety hazard. You should check your policy to see if you have such an exception.
For answers to further questions about auto insurance deductibles or online auto insurance quotes San Diego drivers appreciate, get in touch with American Tri-Star Insurance. If you’d like more information or a free quote over the phone, please call 619-272-2100 today and one of our representatives would be happy to assist you. We hope to hear from you soon.