A deductible is what you would have to pay if you get into an accident, before the  auto  insurance  provider pays up to their limits. For instance, if the deductible that you chose  is $500 and the damage during the accident is $2,000, you would cover first the $500 and the  auto  insurance  provider covers the remaining $1,500. Similarly , if your deductible is $500 and the damage is $300, you will cover the whole thing.

You pay a monthly premium for your  auto  insurance and this normally doesn’t change within the year, except if you get into an accident. Your total monthly payment depends on the amount of deductible you want to pay, or the amount of upfront fees you’re willing to cover in case of an accident.

In general, the deductible amounts in  auto  insurance range from $100-$1,000, depending on the choices given by the  auto  insurance  carriers . If you are willing to pay higher deductible in the event of an accident, your monthly  auto  insurance premium will be  cheaper .  Hence, if you  pick  the  smallest  deductible, this means that the  auto  insurance  provider is responsible for almost all expenses, you would have higher  auto  insurance premium.

The choice that you make on the deductible on your  auto  insurance would depend on how much you can pay for as well as how frequent you  assume  to need your insurance. If you are likely to have a road mishap of some kind every few months, you would probably choose to cover the minimum deductible and let the  auto  insurance  provider cover the bulk of the expenses. If you are a safe driver and has a/an  stellar driving record, you may opt for a higher deductible and pay  cheaper  premium instead.

Each  auto  insurance  provider has a limit on how much they would have to cover in an accident. Your  auto  insurance premium every month would also affect this, so you can make a decision on how high you would like to go for the best limit, without paying excessively every month.

Naturally, you’re liable to cover the amount of your deductible, but the moment the  auto  insurance  provider has covered their limit, you would pay any expenses in excess of that amount.

For instance, your deductible is $1,000, the limit is $12,500 and the damages are worth $15,000. You will cover $500 first, then the  auto  insurance  provider covers $12,500, and you will be liable for the rest which is $2,000.

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