What is an auto insurance deductible?

auto insurance questions

When we graduate to adulthood, we’re often expected to know certain things—particularly when it comes to insurance.  Yet, many people just don’t understand all the jargon involved with insurance, no matter whether it’s medical, dental, homeowner’s, auto insurance, or anything else.  One of the questions we hear occasionally at O’Rielly Collision Center is, “What is a deductible?”  If you are confused about your auto insurance policy and what a deductible stands for, then let us help clarify.

Deductible: the official definition
According to Merriam-Webster.com, here’s the full definition of deductible: “A clause in an insurance policy that relieves the insurer of responsibility for an initial specified loss of the kind insured against, also: the amount of the loss specified in such a clause.”

Basically, a deductible is the amount of money that you, as the insured, state that you are willing to pay out of pocket in the event of an accident.  The higher the deductible that you opt for, the cheaper your auto insurance policy will likely be.  Once the deductible is satisfied, your insurance company should cover any additional costs.

car insurance questions

Why do insurance companies require a deductible?
In general, a deductible is used to prevent auto insurance companies from having to cover every minor repair for their policy holders.  By limiting their responsibility for cheaper repairs, a deductible allows insurance companies to offer more affordable policies.

How do I know how much of a deductible I should be responsible for?
When choosing an auto insurance policy or perhaps just re-examining your current policy for cost-savings, a good place to start is with your deductible.  Depending on your financial circumstances, you may be able to increase your deductible amount high enough to save money on your insurance policy.  Lots of insurance companies have policy calculator tools on their websites, so take advantage of this when exploring what will work best for you.

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When selecting your deductible amount, keep in mind how much money you have in savings, since you’ll need to pay the deductible amount out of pocket.  If your deductible is $1,000, but you frequently have less than that in your account, then you should select a lower deductible.  If you keep your savings account stocked with plenty of extra money, then consider increasing your deductible to a higher rate, if you’re comfortable with that.  It’s a personal decision that can be difficult to address, since it involves comparing your present circumstances with a hypothetical, worst-case scenario.

For a repair you can trust, bring your car to O’Rielly Collision Center.
Our goal at O’Rielly Collision Center is to make the repair process as easy for you as possible.  We will work with you during the entire process of having your vehicle repaired and will also contact your insurance company for you.  When you’ve been in an accident, the last thing you want to deal with is any extra stress. 

When you take your car to an auto body shop in Tucson or Green Valley to have it fixed, naturally you’re going to want to make sure the job gets done right.  We have state-of-the-art equipment, the best technicians, and we offer a lifetime warranty on all the work we do.

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