When you’re purchasing your insurance policy, you’re asked about deductible options. For example, on an auto insurance policy, they may ask you if you want a $500 or $1,000 deductible. I’ll bet a lot of you have questioned whether or not you want to spend more money before the insurance company pays out.
The reason for a deductible, in part, is to prevent numerous small claims from being made. If a claim is not much more than the deductible, the insurance company will surely pay it out, at the price of a higher premium on future renewals up to five years.
So why would there be an option for a higher deductible? What are the pros and cons of a high deductible?
Con: The biggest con, obviously, is paying out of pocket for this expense. That could put a damper on your mood.
Pro: A higher deductible makes for a cheaper monthly payment. You’ll be paying less overall, and if you don’t have to file a claim, the cheaper premium can be beneficial for you.
Con: Depending on your financial situation, it can be tough to come up with a higher deductible amount at the time of the incident.
Pro: Regardless of the higher deductible, it’s still less than what you would have been paying out of pocket without insurance.
Pro: If you a small claim, your insurance rates are going to go up. If something happens that would result in a much larger claim, it’s possible the insurance company could discontinue your policy.
Do you have questions about your insurance? Find an insurance agent near you with our Agent Finder
Search for a local agent with our agent finder map.
Read more about KayLynn's background.
Get More From Your Smartphone with These Life Enhancing Ideas
Not Including Your IQ, These Numbers Could Impact Your Life Most
The Keys to a Longer Life May Be Right In Front of Our Eyes
Do You Need to Give up That Morning Treat to Afford Life insurance?
What is The Value You Place on the Life of a Loved One?
Why the Young and Healthy May Need Life Insurance
Recent Years Have Demonstrated th Value of Versatility
The Clock is Ticking But do You Know What it Means?
Feeling Squeezed by Monthly Bills?
Do You Have a Fear or a Phobia?