Your auto insurance covers repairs, legal fees, and significant expenses from a car accident. However, you must meet a deductible before coverage kicks in. The amount of this out-of-pocket payment varies depending on the policy agreement. There are benefits to both high- and low-deductible plans, as the following guide explores.

High Deductible

A high deductible means the policyholder has to pay more of their own money before their auto insurance kicks in to cover damages from an accident. If they have a $1,000 deductible, for example, and require $7,000 in repairs after an accident, they’ll have to pay the $1,000 before the insurance covers the remaining $6,000.

Many people choose high deductible plans because the monthly payments are less expensive. For those with a history of auto accidents, traffic offenses, or DUIs, it might also be necessary to secure proper coverage. 

When exploring these plans, consider how much you can afford out-of-pocket. Alternatively, wait to switch policies until you have the amount of your proposed deductible saved. This will ensure there will be no downtime between the collision and repairs—should it come to that—while also allowing you to enjoy month-over-month savings. 

Low Deductible

Low deductible policies cost more each month but will involve spending less after an accident. Some of these plans offer deductibles ranging from $250-$500.

To determine if this is right for you, first consider your safety level on the road. If you commute long distances or regularly travel for work, you have a greater chance of getting into a collision, which makes a low deductible more appealing. 

These plans are also recommended for exotic and vintage cars that come with unique parts and are, thus, more expensive to repair.

Alternatively, you could opt for a combination policy. While not all collisions are avoidable, you do have some ability to prevent or minimize them by adhering to traffic laws and demonstrating caution. As a result, you may feel comfortable with a high-deductible collision insurance plan. Weather damage, vandalism, and theft are all beyond your control. Therefore, you may want a low deductible for your comprehensive coverage.

If you’re ready to explore your auto insurance options further, contact Allstar Insurance. This Lincoln, NE, insurance agency has ensured clients have comprehensive coverage since 1995. They’ll carefully assess your insurance needs and create an affordable package. Start learning about auto and motorcycle insurance, homeowners coverage, and liability insurance on their website. To request an insurance quote, call (402) 477-0900.