One of the things you will have to select when purchasing car insurance is the amount you want for your deductible, and before you do this, you should fully understand what a deductible is and how it may apply to you in the future. As you prepare to purchase auto insurance, here are three things you will need to know when selecting your car insurance policy.
How it works when you have a claim
The deductible on your policy is one of the most important factors that will affect a claim you file on your policy. If, for example, you cause an accident and have collision coverage, your insurance company will pay for the damages caused by this accident; however, you will have to pay a small portion of the damages. The amount you will have to pay is called the deductible, and your insurance company will require that you pay this before they compensate you for the damages from the accident.
One important thing to know is that if you did not cause the accident, you do not pay the deductible. The person who caused the accident should have insurance, and his or her policy should pay for your damages without requiring that you pay any money out of your pocket. You will only pay your deductible when you are the at-fault driver in any type of auto collision.
You can choose different amounts
Secondly, it is vital to know that you not only have the ability to choose your deductible amount, but you also have the option of choosing different deductible amounts for different coverage types. If you have collision and comprehensive coverages on your policy, you are free to have a different deductible for each of these.
The deductible you select will affect the amount you pay
Understanding how deductibles work may cause you to instantly want to choose a low deductible, simply so that you would pay less if you cause an accident. While this would be true in the event that you caused an accident, you should realize that deductible amounts affect your rates. If you want to pay less money for your policy rates, you would need to choose a higher deductible, as lower ones will cost more for the premiums on the policy.
Now that you understand the way deductibles work, you can choose the right amount for your plan. If you have questions or need to purchase insurance, call an auto insurance company in your area like the Illinois Insurance Center Inc.