What's the difference between a deductible and a premium?
A deductible, on the other hand, is the set amount that you must pay each year (in addition to your premium) towards a loss or liability before your insurance company will start paying on your behalf. Your deductible starts over at the beginning of each year, and you'll have to meet your annual deductible again before insurance will begin to pay.
What is a car insurance deductible and how does it work?
Your deductible is the amount that you pay out of pocket before the insurance company reimburses you for a covered loss. Not every type of car insurance coverage requires a deductible, but for those that do, you’ll typically choose a dollar amount, often $500 or $1,000. The higher your deductible, the lower your rates will be, and vice versa.
Should you pay a higher deductible for car insurance?
It's also important to consider your driving history and the likelihood of filing a claim. You may opt for a higher car insurance deductible because you're betting against having an accident, but if you've had accidents in the past and often drive on busier roads, you may be more likely to file a claim and pay a deductible.