What is an Auto Insurance Deductible?

An auto insurance deductible equals the monies paid by the actual policyholder before any insurance agency will begin payments toward injuries and/or damages. Once the policyholder pays for the deductible, the insurance company will begin to pay for amounts over the deductible amount, up to the amount that the policy states the insurance company is responsible.Typically, auto insurance deductibles are higher when there is a low premium with the policy. Therefore, the lower the premium price, the higher deductible. The reverse tends to be true as well.

Policies and companies do vary, and the policyholder’s driving record, age and previous incidents help to determine the price of the deductible.

There are different variables where deductibles are concerned. The price will most likely be different according to the claim and the type of damage. The price may be different when it comes to damage from a flood or tornado than they would be for a theft where the vehicle is wrecked or stripped of valuable parts. The damage incurred where the owner of the policy is at fall may vary as well. These incidents are not all inclusive, as there are other examples where damage or total loss of vehicle can occur.

Another variable may include whether the deductible covers single incidents, or for an entire year of coverage. For instance, some insurance policies may require that a deductible is required for each accident that happens, or could include everything that happens throughout the year. With the “per incident” variety of policy, if a policy holder has three accidents in a year, than the policyholder must pay a deductible for each accident before the insurance company will cover damages. With the “per year” variety, if a policy holder has three accidents, than the policy holder will only need to pay the deductible once and the insurance company will pay damages for every incident for the remainder of the year up to the maximum amount in the policy.

* The policyholder is the person that owns a vehicle and car insurance policy. Damages to a vehicle can include theft, natural disasters as well as automobile accidents.
* The insurance company is the auto insurer that provides insurance coverage for the vehicle owned by a policyholder.

3 Responses to What is an Auto Insurance Deductible?

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