Raise Auto Insurance Deductibles For a Lower Rate
Reader’s Question:
I live with my big sister, and she keeps telling me to up my deductibles in my auto-insurance to lower my premiums. Is there any merit to this idea?
Caleb
Columbus, OH
Good day to you, Caleb! Well, you seem to be, well, irritated by big sister’s constant “advice.” Anyway, there is truth to what your sister is saying. Let me outline how this thing works for you to better understand it.
Okay, what is a deductible in the first place? The deductible is that value you agree to shoulder once you file a claim with the auto insurance company. An example would be if you file a claim of, for ease of computation, just $1,500. If your auto insurance deductible is $500, then the auto insurance company covers the $1,000. Increasing your deductible value means a lower cash-out for the auto insurance company. So, how would it affect your premiums? Think of it this way, it is kind of like betting, and both you and the auto-insurance company are on a see-saw. So, when you assume more of the risk, the risk on the auto insurance company’s side becomes lower, so they’d ask you put in less money. After all, you would be paying more for the claims now. Why do this? If I was in your shoes, I would assume that I am a safe driver, assuming more risk means making a bet on that being “safe” at most time. I’d agree to have more deductibles. Now, you can give big sis a break.
Comprehensive Car Insurance – Do I Need To Have It?
Reader’s Question:
Hi! My name is Jimmy, and I would like to know a couple of things about getting a car insured . I have the car financed, and I wanna know which kind of insurance would suit best for this setup. Thanks.
Jimmy
Hillsboro, OR
This should be an easy one, Jim. You’re going to need ALL of them. You have to have full coverage, Liability and Comprehensive, and Collision type. This, i think, should hold true not only there in Hillsboro, Oregon, but across all states. You see, Jimmy, finance institutions aren’t about to take the risk of not being able to retrieve the loan amount in case there is total loss. Though “full coverage” doesn’t necessarily mean your car and everything in it is covered, it still would cover “the whole car”– to include those “parts” that are permanently attached to it. Though loosely defined in this sense, it is also about the only type of vehicle insurance coverage the finance institution would want you to carry.
As with any other business, the financing firm will invariably require that you have the means to address issues involving collisions, damages to the vehicle, property, etc., etc. If you consult your finance relations officer, you’d be sure to hear the exact same thing, though maybe in a slightly more acceptable tone. But the bottom line of all this is that they want to get their money back in case you lose the car for some reason or another, and they want to make sure you can get the car fixed if it is damaged.
Cheapest Car Driver Insurance Rates
When people ask me what the easiest way is to get the cheapest car driver insurance for their muscle car, I can answer them with one simple word: your deductible. This is often the thing that people don’t want to deal with, and one of the biggest hassles when it comes to a car insurance claim, but it is simply the best and quickest and easiest way to get the cheapest driver car insurance.
So what do you do with your deductible? Raise it. I would say that the smallest that your deductible should be is around five hundred, but for the best results raise it to at least a thousand. The reason that having a higher deductible gets you the cheapest car driver insurance is because it makes it to where you have to pay the most at one time, after you make a claim for an at fault crash, instead of paying so much over time and possibly never getting into an at fault high performance car insurance accident.
Not sure that raising your deductible is for you? Think about a few factors, such as whether it’s more reasonable for you to pay your insurance over a certain amount of time or to pay a larger amount all at once. If it isn’t in your budget, then you might have to pass. However, you could simply choose the cheaper monthly premium and set aside the money that you might have been paying if your premium were higher for that chance of a deductible. If you do end up needing to pay a deductible, then you have that set aside–if you don’t, then you’ve started a nice little savings.
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