Choosing the Right Deductible for Car Insurance in Austin TX

by | Sep 10, 2014 | Insurance

An important decision that Austin area consumers need to make when buying auto insurance is to choose the right deductible. The deductible is the amount of money that the consumer has to pay towards a claim before the insurance company will pay anything. As the amount of the deductible goes up, the amount of the premiums goes down. That is why it is not always wise to choose the lowest deductible possible. Furthermore, insurers may increase rates on some consumers who have frequent claims, especially if those consumers are found to be at fault for the accident. On the other hand, most consumers would rather avoid paying a large deductible. A consumer needs to strike a balance between maintaining a reasonable premium amount and a reasonable deductible.

When choosing the deductible on Car Insurance in Austin TX, many consumers may not have much of a choice when determining the amount. If the vehicle is being financed or leased, the financing paperwork may contain a clause stating the maximum acceptable deductible for collision and comprehensive coverage. To avoid a breach in the loan contract, consumers need to make sure that they don’t exceed the maximum deductible allowed by the lender. In many instances, the maximum allowed deductible is either $500 or $1000. But the exact amount varies depending on the lender.

Most consumers end up picking a reasonable deductible when buying Car Insurance in Austin TX. Most will favor lower premiums rather than a lower deductible. The savings from lower premiums can be realized immediately. As long as drivers do not get into any accidents, choosing the higher deductible will be the right choice. If a motorist ends up having multiple claims, he or she may benefit temporarily from the lower deductible. However, future insurance bills may rise significantly due to the claims history. Changing insurance companies will not help since insurers have access to drivers’ records including accidents, tickets, and insurance claims. That is why choosing a higher deductible to get lower premiums is usually the right choice. Those who need more help in choosing the right amount of auto insurance coverage or the right deductible amount should contact Patrick Court at State Farm for more information.


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