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Effects of Modifying Car Insurance Deductibles

Agreeing to pay some extra cash before the policy kicks in, means that you will have more financial responsibility.  This may have some benefits or cons.  The most obvious benefit it changing the overall insurance costs.  Find out the effects of modifying car insurance deductibles and visit us for free online auto insurance quotes

# auto-insurance-discountsChanging the deductibles on your policy affects what you pay in premiums, and is one of the ways that drivers can control the auto insurance rates and risks they’re comfortable paying. The amount of the deductibles is inversely proportional to the premium, so increasing your deductibles will lower your rates, and vice versa. Varying deductibles can save drivers money on their auto insurance premiums.

Collision and comprehensive are the 2 policies that require deductibles. And since collision coverage costs about 4 – 5 times higher than comprehensive coverage this means it is more cost-effective to select a higher deductible for your collision coverage and a low deductible for your comprehensive coverage (since you won’t be saving much in premiums by increasing that deductible).  if you change your deductible to an extremely high amount, you will most likely save a certain amount of money on your entire auto insurance policy.

However, the savings per month have to be weighed against the potential cost if you do need to file a claim. Having a $1,000 deductible does not make any sense if you cannot afford that $1,000 if you need to file a claim.

When you contact your insurance company to let them know you will be reducing your deductible, they will do some fast calculus and inform you what your new monthly premium will be and it will be effective immediately. Reducing your deductible means you will owe less in one lump sum but a little bit more each month. Be careful to calculate if it is worth paying more every month.

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