budgetingdaily.com » insurance http://budgetingdaily.com Thu, 03 Dec 2009 05:41:54 +0000 http://wordpress.org/?v=2.8.6 en hourly 1 Raise your deductible and put it in the bank http://budgetingdaily.com/cut-your-expenses/raise-your-deductible-and-put-it-in-the-bank/ http://budgetingdaily.com/cut-your-expenses/raise-your-deductible-and-put-it-in-the-bank/#comments Mon, 13 Oct 2008 14:15:01 +0000 latoya http://budgetingdaily.com/?p=51 Unless you’re someone that frequently has car accidents, car insurance is a necessary evil. You can end up paying thousands of dollars over the years and never get the benefit of having insurance.  But, most state’s require you to have it. Plus, it’s better to have it and not need it than to need it and not have it.

One of the ways to decrease your car insurance premium is to increase your deductible.

Your car insurance deductible is the part you pay when you make a claim. For example, if you have a $500 deductible and your claim costs $1,000. The insurance company will pay $500 and you’ll be responsible for the other $500.

Deductibles are usually something like $100, $250, $500, or $1,000. The lower your deductible, the higher your premium and vise versa.

If you’re a safe driver and rarely make claims, you could raise your deductible to the highest possible and save money on your car insurance premium. No matter what level your deductible, it’s a good idea to have it stashed away in a savings account or emergency fund so you have access to it when you need it. Otherwise, you could be forced to borrow the deductible at a high interest rate, which could negate any savings.

Now, if you’re someone who frequently makes claims, it’s better to keep a lower deductible. If you don’t, you’ll pay a hefty price each time you make a claim. You should still keep the deductible in an easily accessible savings account.

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