Car Insurance That Matters Most

A deductible is a special feature that can save you money on your Collision insurance. Deductibles are generally disliked by most people. People don’t like deductibles. It is time to change the way you think about deductibles. You have the opportunity to be responsible for your financial problems by having a deductible. This is because your premium will be lower if you have a higher deductible.

If you raise your deductible from $500 up to $1,000, you will see a substantial reduction in premium costs. You can increase your deductible up to $2,500 with some companies. “But I can’t afford $1,000 to have my vehicle repaired!” You might respond, “That’s why I have insurance!” This is not the right reason. In fact, you will pay more than $1,000 to your insurance company over the course of time to protect yourself from what is not a financial setback but a catastrophe.

You could easily save $1,000 if you took the premium difference from increasing your deductible and invested that money in insurance. You would lose $1,000 if you had a $1,000 deductible. Although this is a financial setback that can be very painful, it’s not necessarily financially fatal.

You can save $2,500 on your vehicle insurance, and a $2,500 deductible reduces your premiums. Continue saving until your vehicle’s actual cash value is reached. Then you can drop Collision coverage. You are already insured. It is not a good idea to owe more than your car is worth. Insurance companies pay only for the car’s value, and not the amount of the loan.

Let’s now look at Liability Coverage, the other type of car insurance that is included in your policy. This type is for paying for any injuries that are caused by your driving error to others.

What expenses could you incur if someone is hurt in an accident? It all depends on the severity of the injury and how many people are hurt. How much would it cost to cover the medical costs of someone paralyzed from an auto accident? How much would it cost to have surgery done? Hospitalization? Rehabilitation? What would it cost to compensate the person who has been injured? These are not thousands. These are potentially hundreds of thousands. This would be a disaster for all.

People often limit their Liability coverage to the minimum state requirements. The state limits are usually presented as follows: $25,000 per person; $50,000 per incident; $10,000 for property damage. This means that your insurance company would only pay $25,000 per person injured in an accident. The total cost for the accident would not exceed $50,000. You would also be covered for $10,000 damage to the vehicle of the other person. What number of days would $25,000 pay for? There aren’t many. Who pays for the hundreds of thousands more in medical expenses? You do.

Many people don’t know that Collision Coverage is the most expensive component of their car insurance policy. It is the part that protects you least. Although it is the cheapest option, liability protection provides the best coverage for catastrophic loss. For a few extra dollars per month, you can increase your coverage up to $100,000 per person, $300,000. per incident, or $100,000 for property damage.

To save money and increase your coverage, you can raise your Collision Coverage deductible to $1,000 or $2,500. If you aren’t comfortable with going this high, save $1,000 and then increase your deductible. It’s not an easy task, I know. Would you rather be responsible for your own health or pay the insurance company forever? It is possible to reach $1,000 and you are in complete control of your coverage. If your vehicle is older and more expensive, you can drop Collision coverage and increase your Liability limits.