Have you ever talked with an insurance agent or finance company and heard the word deductible, leaving you wondering what it was and how it worked? Rest assured, the friendly and highly knowledgeable agents at Sump Insurance in Clarinda, IA, are here to explain it to you in an easy-to-understand way.
A deductible is the stated amount you are responsible for every time you file a claim. After you pay the auto insurance deductible, your insurance company will provide coverage or the remaining cost of repairs needed to replace your car altogether.
For example, if you have a $500 deductible and your covered vehicle has $2000 in damage, you are responsible for the first $500 of repairs, and your insurer pays the remaining $1500.
Typically, deductibles in auto insurance refer to comprehensive and collision coverages on an auto policy. However, there may also be deductibles for uninsured/underinsured motorist property damage in Iowa.
When it comes to auto insurance deductibles, the choice is yours. A popular deductible amount is typically $500, but don’t feel limited by that. Companies may offer deductibles as low as $250 and as high as $2500 or more. Remember, the lower the deductible, the higher your monthly premium payments will be, and vice versa.
For instance, a $500 deductible on the same vehicle will cost you more in premiums than a $1000 deductible.
Suppose your deductible is higher than the cost of the damage to your car. In that case, you’ll be responsible for paying out of pocket for the entire cost of repairs. For example, if you have $600 of collision damage but carry a $1000 deductible on your policy, you would not need to file a claim but pay for the repairs yourself because the damage is lower than the deductible amount.
For More Information
For more information about auto insurance deductibles and to determine the best coverage for you and your vehicle, call Sump Insurance in Clarinda, IA, at 712-542-5555. At Sump Insurance, service is our specialty.
