Everyone is interested in saving money on their auto insurance. Choosing the proper deductible amounts can help you achieve your goal of saving money. It is most important to choose policy deductibles that are appropriate for your situation. By choosing the appropriate deductibles you can ensure proper coverage and also save some money on your insurance premiums.

Many people will purchase lower liability limits to save money on insurance premiums. This puts you at risk for a large financial loss. It is important to consider the protection the liability section of the auto policy provides you. This is the section of the policy that will pay injuries and damages to another party if you are at fault in an accident. No one ever thinks they will be at fault in an accident, but it can happen to anyone at anytime. Assume you are at fault in an accident and the other party has injuries of $200,000; and you have liability limits of $100,000 with a $100 collision deductible. You will be responsible for the additional $100,000 to the injured party plus the $100 deductible for repairs to your vehicle. Now if you had $1000 collision deductible with $250,000 liability coverage, the insurance company would pay the injured party $200,000 and you would have to pay $1000 to repair your vehicle. It would be easier to pay the $1000 deductible to repair your own vehicle than to pay the additional $100,000 to the other party injured in the accident. This is why liability is the most important section of the auto policy and you need to have adequate liability limits. Instead of lowering your liability limits it is better to raise the deductibles on your auto policy to save money on your premium.

Some people have different deductibles for the comprehensive and collision coverage on their auto policy. They feel the comprehensive deductible should be less. However you can save on your insurance premium by having higher deductibles and keeping them the same amount. Having equal and higher deductibles on comprehensive and collision coverage provides a couple of advantages.

First of all, it is easier to remember one deductible than two separate deductibles. If you have a claim you will always know your deductible amount regardless of the type of loss. Secondly, if you can afford to pay $500 or higher deductible for damage caused by a collision, you should be able to afford to pay a $500 or higher deductible for a comprehensive loss. People often make the comment that comprehensive is “glass coverage” and if the deductible is $500 or more then they won’t benefit from this coverage. It is correct that glass claims are handled under comprehensive coverage, but that is not the only coverage it provides. Comprehensive also covers hail, fire, theft, vandalism, collision with an animal, and many other types of losses. Another factor to consider regarding glass coverage is that most insurance companies will also waive the deductible if the windshield is repaired rather than replaced. Purchasing higher deductible amounts that are comfortable to you provides coverage for your vehicle and makes the premium less.

When you are choosing your insurance deductibles choose a deductible that is comfortable for you, but keep in mind the importance of the liability coverage on your auto policy. You do not want to put yourself at risk by having inappropriate liability limits. Also remember that your comprehensive coverage covers more than just glass claims so choosing higher deductibles can save you money on premiums and still provide the coverage you need. Choosing the appropriate deductible for your situation is an important step in purchasing an auto policy.

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