No matter how much your deductible is on your car insurance, you will need to pay that deductible prior to the insurance company paying out their share of any claim. If you can’t afford your car insurance deductible on your policy then you may need to lower your deductible; however, that will raise your premium, so you need to look at the entire situation before making your decision.
If you are in the situation where you need to submit a claim but can’t afford your deductible you do not have many options. The ones you have are discussed further into the article. You will need to pay your share of the claim (your deductible) before the insurance company will issue any payments.
However, there are a couple of things you can do to try to save money on your deductible. Read on and then be sure to enter your zip above to compare car insurance options!
Car Insurance Deductible versus Car Insurance Premium
When people purchase car insurance they frequently shop around for the lowest rates and the best deals. Sometimes this includes choosing a higher deductible policy in order to reduce the premium. This is a very viable option, but all things must be considered prior to making this choice.
There are two factors to consider when determining which deductible amount to choose. The first is the difference in premium and the second is the out of pocket expense. If you can safely afford the out of pocket expense on the higher deductible then it is usually a sound idea to go ahead and purchase the policy with the higher deductible and the lower premium. The hope, of course, is to never have a claim (or only have a limited number of claims) and thereby save the difference in premiums over the years.
However, if you cannot afford the higher deductible out of pocket, then you may be safer paying for a lower deductible even though it will cost you more on your premiums overall. That way, if you ever do have to submit a claim, you will be able to afford your deductible and get your car back on the road as expected.
Lowering My Car Insurance Deductible
If you currently have car insurance and don’t think you can afford your auto insurance deductible, then it may be a good idea to discuss your insurance policy with your agent or shop around for some other quotes. Find out how much more you will spend on your insurance premium if you lower your deductible. Since rates tend to be competitive, you can usually find a lower rate just by shopping for one. To compare rates now for free, enter your zip code.
Before automatically lowering your deductible, find out if there are any options available that can help you reduce your current premium. Perhaps you have excessive coverage amounts or you qualify for some discounts for which you were not aware. If you can lower your premium then you have an opportunity to set the savings aside for future use toward your deductible if ever needed. The caveat to this is actually putting the money aside so that you have it if the occasion arises.
Paying for My Car Insurance Deductible
When you bought your car insurance you may have not had any concerns about your deductible, but situations can occur that leave you facing the unexpected. Perhaps you placed your deductible amount in a savings account but needed it as emergency money to repair or replace a broken appliance, or maybe you needed a new set of tires. Or you very simply may have not put any money aside for your deductible, planning on having the money in your account if you ever needed it. If the day comes when you have a claim but you can’t afford your car insurance deductible, you have a couple of options.
If you have an accident or any claimable incident then it needs to be reported to the car insurance company right away. However, not all repairs need to be done that quickly. For example, if your car is involved in an accident and the front end of your car is dented but drivable, then you may be able to wait to have your car repaired. Some insurance companies cut a check directly to you based on estimates while other companies issue the check to the repair shop. You will need to find out how much time you have to get your car fixed if the latter issue applies to your situation.
Under dire situations, you may need to tap into an emergency fund or borrow money for your deductible. Payday loans are short term loans that advance your payroll to you, usually within 24 hours, on the premise that you pay it back in a short amount of time for a somewhat high interest rate. This is not the ideal situation, but it is a possibility if you need instant access to cash.
The best thing to do to afford your deductible is to set aside that specific amount in a savings account or lockbox and save it only for use as your deductible. If you never need it, then you have a little nest egg, but if you ever do need it then it will be there for you. As you are able to save more, you can always add to the savings account and increase your deductible which will lower your premiums and save you even more money. To compare rates on premiums and deductibles from a number of popular providers in your area, enter your zip code above now!
