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Auto Insurance Coverage:Understanding
Deductibles and How Deductible Levels Can Effect Your Insurance
Premiums |
If you are in the process of purchasing a new or replacement
automobile insurance policy, you may have some basic questions
about a typical car insurance policy. In this regard, you
may be wondering what is meant by and involved with endorsements
and changes to your automobile policy. Through this article,
you will be provided with some basic information about understanding
endorsements and changes to your automobile insurance policy.
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What
is a Deductible? |
While
you may have heard the term, you may not know precisely what
is meant by the word deductible when it comes to considering
a policy of car insurance. In simple terms, the deductible
or a deductible is the amount of an overall claim that you
will be responsible for paying yourself.
By way of example, let’s imagine that you have been involved
in an accident that results in $2,000 worth of damages. Let’s
further assume that you have a deductible associated with
your car insurance policy in the amount of $500. You will
be responsible for paying $500 of the claim while your car
insurance company will be responsible for paying the remainder
of the amount due and arising out of the accident in question.
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How
Does Your Deductible Effect the Premium Charged by a Car Insurance
Company? |
You actually can
control to some degree the costs associated with your car
insurance by considering the deductible that you have associated
with a particular car insurance policy. Generally speaking,
if you increase the deductible associated with a car insurance
policy -- in other words, if you agree to pay more of the
costs associated with a car accident -- the premiums that
you will pay on a car insurance policy will lower.
Conversely, if you are willing to pay a bit more for insurance
and simply do not want to have to fork over a significant
amount of money out of your pocket in the event of a car accident,
you can lower the deductible associated with the car insurance
policy your purchase. While you will pay more in car insurance
premiums over time, if you do end up involved in an accident,
you will not have to come up with a handful or more to deal
with a deductible associated with a policy for a car insurance
company. |
Summary |
When it comes to obtaining coverage
from a car insurance company, you will want to make certain
that you consider the issue of the deductible. While contemplating
whether a lower or higher deductible is best for you, you
will be better able to budget for your insurance premium needs
now and into the future.
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