Innumerable types of car insurance are available in the market and when it comes to buying one, you consider its various aspects like car insurance premium, car insurance coverage, Bonus and various offers. However, if you do not give a thought to the Term deductibles and choose it randomly, you may end up paying a huge amount of cash in case of an Accident or higher amount of premiums when you carry a good driving record
What are deductibles?
Well, this is what deductibles stand for- the proportion of the cost of car damages supposed to be paid by you, should you ever get into an accident. But, this again depends on various conditions that are attached to the option of deductibles and whether you will loosen the strings of your pocket or not is determined by the fact that you are at fault or no-fault situation.
How deductibles affect car insurance
Amount of deductibles is a very important aspect to decide while buying the car insurance policy as it can affect your car insurance at a later stage.
Influence on the car insurance coverage
The first thing influenced is coverage. The higher is your Deductible the lesser is the Coverage and with the lesser deductible, the more is your coverage. For example, your deductible amount is 1000 Rs and when an accident occurs, the damages to car cost 1200 Rs, then you are liable to pay 1000 Rs and the insurance company will pay rest of Rs 200. In other cases when the deductible amount is lower, say 500 Rs, in an accident that incurred the loss of 1200 Rs, the first 500 Rs will be borne by you and rest 700 Rs will be paid by your insurer
Influence on the car insurance premium
Before considering any other aspect customers give utmost significance to the car insurance Premium as it will impact their personal finance. Furthermore, when they are offered a lower amount of deductibles, they easily get tempted and sign the car insurance policy. However, they forget that lesser deductible would cost them a higher amount of premium even when they are holding clean driving records. Therefore, the prior importance should be given to the number of deductibles and not the premium.
How to decide the deductibles?
You can determine the number of deductibles by reflecting on the following points:
If you think you hold a good driving history and chances of traffic accidents caused by you are minimal, then you should go for higher deductibles, this will automatically decrease your car insurance premium and you will be able to save a substantial amount.
Furthermore, if you ever have a collision and you need to pay cash out of your pocket as deductible, it will be much less than your savings from your car insurance policy. Plus, if you never have an accident, the entire amount you are saving from car insurance premium goes straight into your pocket.
However, if you think there are possibilities of collision and you do not have a good driving history too, then you should go for a car insurance policy with low deductibles. Though your car insurance will become expensive a bit but you will be spared to pay the huge amount of cash from your pocket every time you get in an accident.
Amount of deductible is to be chosen by you and therefore it depends on you how it affects your car insurance, therefore choose the deductible which makes you save considerably and at the same time you are able to afford the damage if ever it occurs to you.