How much is your auto insurance deductible? If you are not sure, you can (and should) check your car insurance policy. The deductible is the amount you must pay before your policy's coverage kicks in to help cover your losses. This number ranges widely. However, you do have some control over it.

Choosing the right deductible can even reduce your premium costs. How can you ensure you are not overpaying?

Learn What Your Deductible Is

Your first step is to determine what your current car insurance deductible is. Your vehicle policy lists this in its details.

In all situations, this is money you should have on hand. For example, if an accident occurs, you must be able to cover this dollar amount of losses before the insurer covers the rest. If you cannot, you may not be able to get the repairs owed to you.

Here is an example. You have an accident causing $2,000 worth of damage to the car. Your deductible is $1,000. Do you have $1,000 to cover the losses?

When choosing or changing your deductible, always keep that in mind. What is the highest value that you can afford out-of-pocket at any time?

Raising Your Deductible

The higher the deductible is, the lower your premium often proves. The premium is the amount you pay each year to maintain car insurance. When you have a high deductible, your insurance rates fall. That's because the insurer is less likely to have to pay out a significant amount for a claim. In the above example, you may wish to raise your deductible to $2,000. This could reduce your premium significantly. However, you need to have that amount on hand to cover losses, should they occur. If you do not, it becomes too risky to raise your deductible.

Lowering Your Deductible

Are you concerned your deductible may be too high? In this case, it may be wise to lower it. This may mean paying a bit more over the course of the year for coverage. Yet, this might be a prudent move. It ensures that if an incident occurs, your car has coverage to get it back on the road.

Work with your Park & Associates agent on this. Compare the difference in costs to you for a car insurance plan with a lower deductible and a higher one. As long as you can afford a higher payment, it may be an excellent way to save money.

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