Car Insurance Deductibles Explained

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Every car insurance policy will come with a deductible. A deductible is the amount that you are responsible for paying should you need to make a claim. The actual amount you pay will depend on the type of policy you have purchased. When you go to renew your insurance you can usually adjust your deductible to fit your needs, or at least your perceived needs at the time of renewal.

How Much Is My Car Insurance Deductible?

The amount you pay will vary depending on the province you live in and the insurance company you are insured with. Your deductible might be $250, $500, or $1,000. If your deductible is $1,000 and you are found to be at-fault in an accident that causes $4,000 of damage on your vehicle then you are required to pay $1,000 out of pocket. In that example the insurance company would pay the remaining $3,000 to fix your vehicle. Some policies will have cheaper deductibles for certain types of damage. For example, if you have a comprehensive insurance policy with ICBC then you will only pay \$200 for a replacement windshield. However, your deductible for other damages may be more than $200. If you live in British Columbia, your ICBC Autoplan broker can help you determine your deductibles and explain the process to you. State Farm Insurance, which provides auto insurance in Alberta and Ontario, has various deductibles and they are typically offered in increments of $500.

Choosing a Deductible

If you are willing to increase the cost of your deductible then you will pay less for auto insurance. What you’re saying to the insurance company is that you’re confident that you will not be in an accident and that you’re willing to back that up with a higher deductible. In return, the insurance company is willing to lower the cost of your premiums. Some insurance companies will not allow you to increase your deductible so check with your insurer before you renew your policy to see if they have any restrictions.

When deciding your deductible think about some of the following factors:

-Provincial requirements
-How much it will cost if there are damages or vandalism to your vehicle
-How much it will cost if your car is stolen
-How much you are willing to pay for your initial insurance coverage
-How much you are willing to pay out-of-pocket should there be an accident

In some cases you can save as much as $100/year if you are willing to increase your deductible from $500 to $1,000. If you haven’t had an accident in 10 or 15 years then you might want to think about increasing your deductible but it’s always safer to go with a lower deductible – just in case you are in an at-fault accident. Before you do anything get in touch with your local insurance agent to go over any decisions that you need to make. Deciding on a deductible is a personal decision and you will have to weigh out the risks against the savings. Good luck with your insurance search.

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