Adjusting your deductible is one way to manage car insurance rates, but keep this in mind. A general rule of thumb is that if the cost of comprehensive and collision insurance exceeds 10% of the value of your car, you can consider eliminating them. However, before you abandon full-coverage insurance, you should consider your financial situation and the likelihood that you will file a claim. If you're not financially able to pay out of pocket for the repair or replacement of your car if it suddenly breaks down, you should continue to take out comprehensive and collision insurance.
Choose an automatic deductible amount that you're comfortable with and make sure you can pay your deductible out of pocket in the event of a claim. It's also important to consider your driving history and the likelihood of filing a claim. You can opt for a higher car insurance deductible because you're betting against having an accident, but if you've had accidents in the past and drive often on higher-traffic roads, you're more likely to file a claim and pay a deductible. Conversely, a low deductible will increase premium payments.
If the policyholder is not at fault for an accident that resulted in a claim, the person has paid more for car insurance than someone with a higher deductible. While comprehensive coverage will apply if your vehicle is stolen, no type of car insurance will cover the theft of your personal belongings from your vehicle. Since each state has different car insurance requirements, total coverage can also include several other types of coverage. Collision coverage applies to damage caused by a car accident, while comprehensive insurance applies to damage caused by something other than a collision, such as vandalism or a natural disaster.
Collision coverage repairs or replaces your car when it's damaged in an accident, regardless of fault, while comprehensive insurance applies when the car is damaged by something other than an accident. It may also be worth taking out comprehensive insurance if the policyholder cannot afford to replace the vehicle without comprehensive coverage, or if the car is being driven or parked in a particularly risky area. Even if your car isn't worth much, it's usually a good idea to have collision and comprehensive insurance if you're not financially able to cover expensive repairs on your own. After you pay the amount of the car deductible, your insurer will cover the remaining cost to repair or replace your vehicle.
Comprehensive car insurance can help replace your car if it's stolen or repair damage caused by theft or acts of vandalism. It's important to note that normal liability insurance doesn't cover theft because it only protects other drivers from bodily injury and property damage as a result of an accident that you cause. While comprehensive insurance isn't required in any state, dealerships and lenders typically require comprehensive insurance, along with collision coverage, for leased or financed cars. Likewise, even if your comprehensive premium is 15% of the value of your car, for example, comprehensive insurance could be worthwhile if you're dependent on the car and can't afford to replace it yourself.
In this example, the car in front of you brakes suddenly to avoid the deer, but you follow it too closely to stop in time and you hit the other car from behind. In general, a car insurance deductible is a sum of money that you must pay before your insurance company covers the rest of your expenses. Things like reimbursement for the rental of the vehicle while yours is being repaired or replaced are offered separately and are generally not included in the term full coverage.