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Should You Raise the Deductible to Lower the Cost of Auto Insurance?

Jun 13, 2008
A common trick that many people employ when it comes to lowering the cost of their auto insurance is to raise the deductible, that is, the amount you would be liable for in case of an accident, vandalism, and so on. Raising it from the standard $500 rate to $1000 can lower your premiums by a hundred dollars or more every six months, depending on your carrier. But should you just do this automatically, thinking that you'll save big dollars? What are some cautions to think about?

For one thing, ask yourself what kind of driver you are. Raising your deductible to lower your auto insurance premiums by a hundred dollars or so isn't going to save you anything if you get in an accident and need to come up with that additional $500 to get your car repaired and meet your deductible. Be honest; if you're a very aggressive driver and you have a history of tickets, this might not be the wisest thing to do with your auto insurance policy.

Depending on your carrier, raising your deductible might not lower your premium by that much either. With some auto insurance policies it may be better to consider other ways you can save money, such as installing anti-theft devices or safety devices such as supplemental airbags, and so on. And of course the best way to keep your auto insurance policy affordable is to drive safely.

The more tickets and accidents you have, the higher your rate will be no matter what. Driving slower saves you gas and wear and tear on your car, and can lower your premium overall, so you definitely have enough reasons to consider slowing down while behind the wheel.

There's no mistaking the fact that auto insurance can be very costly today, and many people are looking for ways to reduce that cost however they can. Some are tempted to drop their coverage altogether, reasoning that since they rarely get pulled over then they'll never get caught. While this line of thinking is appealing to many, keep in mind that auto insurance is not some luxury and it's not available "just in case" of an accident.

It's actually the law that you carry some type of coverage for your vehicle, even if that coverage doesn't include theft, vandalism, or collision. The law requires that you carry coverage for another person's injury or property damage in case of an accident, and there's no getting around this.

Failure to have at least this minimum amount of auto insurance can mean fines and even jail time! Additionally, if someone was to be injured or their property damaged because of your negligence and you didn't have this coverage, you could lose your house and any other assets you may have.
About the Author
Bill Protresi is an online insurance providing tips and advice. Visit Bill at his general insurance siteor site specialized to travel insurance.
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