ANSWERS: 1
  • An auto insurance deductible is the amount of money that you must pay when you file a claim with your insurance company. You insurance company will cover the cost of any damages beyond your deductible.

    Significance

    Auto insurance is good to have and is even required by law in some states. Without it you may get a ticket if pulled over. Also, you may have to show proof of insurance before you can receive your license tag.

    Example

    If you have a $250 deductible and have an accident that costs $1,000 in repairs, you will pay the $250 deductible and then your insurance will pick up the additional $750.

    Time Frame

    When you buy your insurance policy, you will have to choose the level of deductible that you want, generally ranging from $200 to $1,000. You can usually alter your deductible when you need to.

    Benefits

    Generally, you can lower the amount that you pay for insurance each month by raising your deductible.

    Considerations

    Unlike health insurance deductibles, which are annual, auto insurance deductibles are per accident. If you have a $1,000 deductible and have two accidents that year totaling $900 in damages each, you will pay $1,800 out of your pocket---and your insurance company will pay nothing.

    Source:

    Allstate deductible explaination

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