It wasn’t your fault, but you ran your car into a palm tree trying to avoid someone who pulled out right in front of you. Unfortunately, you took out their front bumper before hitting the tree. Luckily, no one was seriously hurt.
So you get out of the car and exchange insurance information with the other driver, and a few days later the insurance adjusters begin calling about how your accident will be paid for. You hope that your California auto insurance rates will not go up because of the accident, and you try hard to remember how much your deductible is.
The Impact of Deductible
One thing that has an impact on your California car insurance rates is the deductible. In car insurance, the deductible is the amount of money that you choose to pay out of pocket before the insurance company pays the expenses on your claim. For instance, if your accident causes $5,000 in damage to your car, and you have a $1,000 deductible, then you need to pay $1,000 and your insurance company will pay the other $4,000. The claims paid will only be up to the limits set forth in your policy.
Deductibles apply to the collision and comprehensive parts of your auto insurance, not the liability portion. They can range from nothing up to several thousand dollars. The higher your deductible, that is, the more you pay out of pocket in the event of an accident, the lower your auto insurance rate will typically be. Auto insurance plans with no deductible are relatively rare, however, and have a higher cost than plans with a deductible.
Having a higher deductible is one way to lower your auto insurance rates, but there are some considerations involved with having a higher deductible. If you don’t have enough money saved to pay the higher deductible, it could cause a financial hardship for you, should an accident occur.
The best course of action is to choose a deductible that you could afford to pay at any time. The most common deductible is between $500 and $1,000. Shopping around for car insurance quotes at different insurance companies may yield variations in rates that could benefit you.
What Happens When It’s Not Your Fault
When it is determined that an accident is not your fault, your insurance company will attempt to get back the money that they paid on your claim in a process called subrogation. This amount may include the deductible that you paid, in which case they will refund your deductible to you.
The deductible is an important feature of your car insurance, and it’s one that deserves careful consideration. Get an auto insurance quote from AIS Insurance that meets your needs for options like deductible in California or any other state.
The information in this article was obtained from various sources. This content is offered for educational purposes only and does not represent contractual agreements, nor is it intended to replace manuals or instructions provided by the manufacturer or the advice of a qualified professional. The definitions, terms and coverage in a given policy may be different than those suggested here and such policy will be governed by the language contained therein. No warranty or appropriateness for a specific purpose is expressed or implied.