Blog by Erie Insurance
There are many choices you need to make when it comes to choosing the right auto insurance. When it comes to customizing your policy, one of the biggest decisions is what deductible amount you will choose.
WHAT IS A DEDUCTIBLE IN AUTO INSURANCE?
Your deductible is the amount of money you will have to pay toward fixing or repairing your car before your insurance kicks in. Deductibles typically only apply to collision and comprehensive coverage. (There may be other cases where you could have a deductible – for example, uninsured motorist property damage – so ask us about all coverages with deductibles.)
Here’s an example scenario: Let’s say you’re involved in an accident and the repair estimate from the auto repair shop is $2,000. If you have a $500 deductible, you will be responsible for paying $500 and then your insurance will take care of the remaining $1,500.
Most people choose a deductible between $100 and $1,000, although they could possibly be as low as $0 or as high as $10,000, depending on the coverage and applicable state laws. We can help explain your options so you can pick an amount that’s comfortable for you.
DO I ALWAYS HAVE TO PAY MY DEDUCTIBLE AFTER AN ACCIDENT?
If you’re deemed at fault for an accident, you typically pay the deductible under your own policy. If another person damages your vehicle and they are deemed at fault, their insurance would typically pay for your damage in its entirety. In that case, you wouldn’t be responsible for paying the deductible under your own policy.
HOW DOES YOUR DEDUCTIBLE AFFECT YOUR PREMIUM?
Generally, the higher your deductible, the lower your insurance premium (which is just a fancy word for price). The lower your deductible, the more you will typically pay for your insurance premium.
Not sure what to pick? No worries – we are here to help.
We can offer you multiple quotes with different deductibles and explain how changing your deductible can affect your annual premium – or show you the cost savings between different options over multiple years. Ultimately, they want you to fully understand your options and feel confident about your decision.