The two biggest costs associated with auto insurance are the premium and deductible. The premium is the total yearly cost of the insurance, usually paid monthly, yearly or quarterly. The deductible is the cost paid when calling the insurance to make a payment in the case of an auto accident. Typically the relationship between an auto insurance premium and deductible are inverse, or opposite one another. When premiums are low, deductibles are high, and the opposite is also true. It’s important to get the right deductible, and the right premium, for the insurance policy that best suits you.
For drivers who don’t drive often, avoid accidents and don’t have regular auto glass or auto body damage due to weather. A low premium, high deductible, plan is often the best idea. This allows drivers to save on the overall payments over the course of the year, assuming they won’t get into any accidents. This type of plan can be risky for anyone living on a fixed budget. Even thought he insurance will usually cover major damage, a high deductible can range anywhere from $500-$1500 or more dollars.
For drivers in who must be on the road regularly, drivers who deal with major weather damage or drive through more dangerous or high traffic areas, a low deductible plan is usually the better choice. A low deductible means a driver pays little in an emergency that calls for insurance, but generally a higher premium. High monthly payments aren’t ideal for anyone but fit many budgets better than a major deductible in the case of an emergency.
Drivers who can find a decent balance of premium and deductible that fits their budget and needs are getting the most of their insurance. A wide range of deductible and premium options are available. Many insurance companies offer special rates on both options.