Of all of the most commonly asked insurance questions in Santa Clarita, CA, “What deductible should I choose?” is at that top of the list. The truth is, there is no one size fits all answer to this question. You can decide which is best for you by understanding deductibles and how they affect you. Here at WPL Insurance Services, we believe in helping clients make informed decisions, so we put together this quick guide:
Your deductible is the amount of money you must pay out before your insurance company will pay any money toward a covered accident. For instance, if you have an accident that causes $6,000 in damage to your car and your deductible is $1,000, you must pay that $1,000 before the insurance pays the other $5,000- provided that $5,000 is within your coverage.
There is a direct correlation between your deductible and your premium. When you choose a higher deductible, your premium- or monthly payments- is lower. When you choose a lower deductible, your premium is higher.
Choosing Your Deductible
Choosing your deductible should revolve directly around the answers to these questions:
- If you were in an accident, how much could you afford to pay for your repairs? The answer to this most likely lies within your savings account or emergency fund. Logically speaking, if you do not have money saved up, you are probably better off with a lower deductible and higher monthly payments.
- Are you leasing your car? Most people that are leasing choose a lower deductible. This is because if there is an accident, they must return the automobile in good, working condition. Choosing lower deductible provides better coverage should an accident occur.
There are other considerations, such as how often you have accidents, but the two mentioned above are some of the most common factors. If Santa Clarita, CA residents have any questions or need help deciding on a deductible, give WPL Insurance Services a call or stop by today.