Auto Policy Deductibles

What is a deductible?

The deductible is the amount of the loss which you must pay. Anything over the deductible amount, up to the value of your auto, is paid by the insurance company.

For instance, if you carried collision coverage with a $100 deductible and you had a $500 collision loss, you would have to pay $100 and the insurance company would pay the remaining $400.

Should I have a high deductible?

Basically, deductibles reduce your premiums and cut costs for the insurance companies. Insurance companies offer deductibles because they reduce the number of small claims which are costly for them to handle. The higher the deductible, the lower the premium you pay. But, you should have savings set aside to pay this deductible, in the event a loss occurs. Do I need special insurance for a classic car?

You should always talk to your agent about coverage of rare and valuable property. Since a classic car usually cannot be replaced, youll probably want ample compensation if it is lost. A classic car, because it is rare or unique, may indeed require a special insurance policy.

Under what circumstance do I not need certain types of auto insurance?

While most drivers today are generally insured for collision and theft, this coverage may not be necessary for every vehicle.

Liability insurance, as mentioned earlier, is essential and in many states required. But if you drive a clunker-an older car that isn’t worth much money-you may be able to do without collision insurance. If you have an accident, repair costs could easily be higher than the value of your vehicle, thus “totaling” it. This means your insurer will pay you the total book value of your vehicle, and that could be far less than the cost of your vehicles repair. So, collision insurance may not cover your loss adequately.

Since it depends on special circumstances, ask your agent for assistance

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