Auto insurance is essential protection that helps cover the costs of an accident, theft, or vandalism. Car insurance plans come in many forms. American Auto Insurance provides uninsured motorist coverage, property damage liability coverage, bodily injury liability coverage, and comprehensive coverage. We even provide SR-22 car insurance verification if the state requires this proof to reinstate your driver’s license. You can count on us for some of the best and most affordable insurance plans in the state of Illinois. You can choose from a variety of deductibles with these plans for the perfect touch of personalization.
What Is an Auto Insurance Deductible?
An auto insurance deductible is the sum an insured individual must pay out of their own pocket before the insurance company covers any repair or replacement costs associated with an accident. You must pay this deductible each time you file a claim. Car insurance deductibles come in the form of either a set dollar amount or a percentage of the total claim.
How Do Car Insurance Deductibles Work?
Your car insurance deductible is what you pay before your insurance coverage kicks in. After you’ve covered the deductible, your insurance provider will pay for the remainder of the bill up to your policy limit. If the damages or repairs exceed the policy limit, you will also be responsible for paying the sum beyond that amount.
You choose your car insurance deductible when you sign up for an insurance plan. You’ll typically have the same deductible for the life of the policy, though your insurance company may allow you to alter it if you have a life-changing event. You can also adjust your deductible when you renew your policy. Deductibles vary by policy and may range from just $100 to $1,000 or more. The typical insurance deductible is $500.
For example, if you’re in an accident where you sustain $2,000 in repair costs and have an insurance deductible of $500, your insurance company will pay for $1,500 in damages while you must cover the remaining $500.
When Do You Pay an Auto Insurance Deductible?
You’ll pay a deductible for most types of insurance coverage. Auto insurance deductibles typically apply to the following:
- Collision insurance: Collision insurance covers the cost of repairing or replacing your vehicle when you hit something, such as another automobile. This coverage applies only to the cost of repairs to, or replacement of, your vehicle. It does not cover the costs of repairing another person’s vehicle or property.
- Comprehensive insurance: Comprehensive coverage applies to the cost of repairing or replacing your vehicle if it’s damaged by vandalism, theft, weather, or other acts of God as specified in your insurance plan. This coverage applies only to the value of your vehicle.
- Uninsured motorist coverage: If you’re in an accident with an individual who doesn’t have adequate insurance or any insurance at all, uninsured motorist coverage will help pay for damages to your vehicle.
- Personal injury protection: Personal injury protection (PIP) covers medical expenses for yourself or your passengers in an accident. It may also cover lost wages, funeral expenses, and other services like cleaning if you cannot do these tasks yourself. The available deductible for PIP insurance varies by state.
You don’t have to pay a deductible if you secure a no-deductible insurance plan. This type of coverage ensures that your insurance company will pay the full amount of the applicable expenses, provided those costs fall within the policy limit. However, you may still be responsible for some expenses if costs exceed the policy limit.
Can I Get My Insurance Deductible Waived?
In some cases, you can waive your deductible. This may be possible if you have broad collision coverage and are less than 50% responsible for the accident. Many insurance policies will waive the deductible for windshield or glass replacement. Some mechanics may waive your deductible as well. Contact your insurance provider to see if they work with approved body shops that will waive your deductible.
Low Deductible vs. High Deductible Plans
When you’re shopping for car insurance, you’ll find that you have a wide range of options to choose from. A low-deductible plan keeps things affordable if you’re in an accident, but it also comes with the highest up-front expense. Forbes reports that a car insurance plan with a $250 deductible has an average annual cost of $1,757. With a standard $500 deductible, that average annual price drops to $1,602. With a $1,000 deductible, you’ll pay just $1,423 a year. On the opposite end of the spectrum, a plan with a high $2,000 deductible will cost $1,259 a year on average.
The exact price for car insurance varies by plan and by individual. You can examine the exact cost savings of a higher deductible yourself by getting a personalized quote from your insurance provider.
The benefit of a high-deductible plan is that you’ll pay less for the plan itself. This is the most affordable option if you never get into an accident. You may also find a higher deductible is better if your vehicle isn’t worth much, and you’re likely to buy a new one rather than invest in repairs. High-deductible plans are best for low-risk drivers.
If you feel that you’re more likely to actually use your car insurance coverage, a low-deductible plan is a better option. Perhaps you live in an area where theft and vandalism are more common, or you have a history of getting into fender benders. If you use your car insurance plan, having a low deductible will pay off.
Get the Car Insurance Coverage You Need From American Auto Insurance
American Auto Insurance is dedicated to helping Illinoisans secure the right car insurance for their needs. We can walk you through every aspect of your car insurance selection, from the type of coverage you want to the deductible amount that’s appropriate to your situation. If the state has asked you for SR-22 insurance verification, we can explain this process to you as well. Call American Auto Insurance now to get a quote, learn more about your options, and secure affordable insurance for your vehicle.