Comprehensive and Collision Auto Deductibles

The comprehensive and collision deductible amount for your auto policy will greatly impact your premiums. Simply, the lesser the deductible, the higher the premium. The greater the deductible, the lower the premium. Comprehensive and collision deductibles can range from zero to one thousand dollars.

NOTE: If your auto is financed, first check with the leinholder, as to maximum amounts allowed. Some financial institutions may only allow you to set your deductibles no higher than five hundred dollars.

Comprehensive coverages and deductibles

It is important that the policyholder understand exactly what is covered under the comprehensive part of your auto policy. Comprehensive refers to anything other than a collision. This includes; striking an animal with your auto, windshield cracks or breakage resulting from a fallen object, rock damage, fallen tree limb, etc.

Statistically, one is more likely to experience a claim that falls under the comprehensive portion of the auto policy as opposed to the collision portion. For instance, lets say you have a one-hundred dollar deductible for comprehensive coverage. In the event that you had to have your windshield replaced, you would be out of pocket, very little money. Most all glass installers will cover or absorb a portion of your deductible. On the other hand, if your deductible is set at five-hundred dollars, your deductible for windshield coverage would become a mute issue, with you absorbing all or the majority of the cost involved in replacing your windshield. In this case, it is not suggested to place a deductible over two-hundred and fifty dollars on the comprehensive coverages.

Collision coverages and deductibles

The collision portion of your auto policy applies to any physical damage that you the policyholder may incur and are found at fault. This includes; collision with another vehicle, lost of control, resulting in a collision, damage to property as a result of a collision.

Most insurance companies offer collision deductibles up to one-thousand dollars. Naturally, choosing the higher deductible will result in lower automobile premiums. Please note that you the policyholder are responsible for the amount of deductible you may choose. As an example, lets say you are found at fault for an accident. The damage to repair your vehicle is two-thousand dollars. In having a one-thousand dollar deductible, the insurance company will only be responsible for repair cost minus your deductible. In this case, the insurance would issue payment for one-thousand dollars, leaving you responsible for the deductible amount of one-thousand dollars.

Naturally, no one can know when an accident may occur. When choosing a deductible for collision coverage, please keep this in mind. Weigh the risk and cost factors when choosing your deductibles. Consider if it is cost effective to choose the higher deductible. Ask your insurance agent to quote your insurance rates using the higher and lower deductibles. Compare the saving of the higher deductible over a six month, year or two year period in making your decision. In choosing the higher deductible, you are essentially (self insuring) a portion of the financial responsibility in the event of an accident in which you are at fault.

Note: It is cost prohibitive to carry collision insurance on an older model vehicle. Generally, a vehicle that is valued below three thousand dollars needs only liability coverage. Most lending institutions will allow an individual to drop the collision coverage when the amount owed on a financed vehicle reaches or falls below three thousand dollars. Naturally, one needs permission from their lending institution before dropping their collision coverage.