Choosing a deductible amount for any insurance policy is a more important decision than you might think. A deductible is the amount of money you agree to pay out-of-pocket, in the event of a covered loss, before your insurance company begins paying for damages. Is it better to choose a higher or lower deductible? The answer may vary from person to person. Generally, it depends on how much you are willing to pay in premiums, and how much you can afford to pay out-of-pocket following a covered loss. Your California insurance agent may be able to explain how deductible amounts affect insurance premiums for each type of policy available to you.
For example, you may want to consider the level of traffic congestion in your area when choosing an auto insurance deductible. Some drivers who live in large cities with a lot of traffic and a greater frequency of accidents may want to choose lower deductibles. This typically results in a higher premium. In contrast, choosing a higher deductible may result in a lower premium. Drivers who live in rural areas where accidents are less frequent may prefer a higher deductible. You might also base your decision on your own track record of accident involvement or vehicle related claims.
Selecting a deductible for auto or other insurance coverage can affect your premium – sometimes by only a little, and sometimes by a significant amount. Contact your California insurance agent for details concerning premiums and deductibles for multiple insurance policies.