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Does it Make Sense to Carry a High Deductible on Your Car Insurance?

It’s one of the most common questions when purchasing new auto insurance or auditing your current insurance: should I spring for a high deductible or go for a lower deductible? In this blog, we pose three questions to help you make the right choice for your needs. 

How is Your Emergency Fund?

The most common deductible choices are $500 and $1000. When deciding which is best for you, you should be sure to take a close look at your emergency fund. A $1,000 deductible won’t help you if it is outside of your means. On the other hand, if your situation improves financially, you can always switch to a higher deductible. As a result, you will find that your monthly premium decreases!

How Much is Your Vehicle Worth?

Consider the value of your vehicle when choosing your deductible. The more it’s worth, the more it will cost you to insure. By carrying a higher deductible, you will likely bring down your monthly premium rate and reap significant overall savings as a result. Plus, the risk of actually filing a claim is lower with a brand new, reliable vehicle. 

As your car ages, you should consider switching to a lower deductible plan. Older cars are valued less, and they cost less to insure as a result. With a low deductible, you’ll be able to easily jump to fix issues that your car develops later in its life, rather than ignoring the issues as a means to avoid paying a high deductible. 

What Are Your Risk Factors?

How likely are you to make claims for your vehicle in the future? How about other drivers on your policy? Everyone has some level of risk- otherwise, car insurance wouldn’t be mandatory. If you feel that the chances you’ll be making frequent claims are high, you should definitely favor a lower deductible. On the other hand, if you’ve made claims infrequently in the past, you can save money by choosing a higher deductible and lower monthly premium. 

Choose the Right Deductible for You at Freedom Insurance

We offer comprehensive, customized coverage from numerous major insurance carriers and make it easier than ever to find affordable policies that are exactly what you need. We have been serving clients throughout the greater Howard County and Carroll County areas since 1979, and we look forward to helping you and your family thrive. Get in touch today by calling (410) 795-2000 or requesting a free quote.