What Deductible Should I Carry On My Autos?

We are asked all the time, “What deductible should I carry on my auto policy?” The standard auto deductibles we see at Bradshaw & Weil, Inc. in Paducah, KY are $500 or $1000. When choosing your deductible you want to consider the value of your vehicle and the impact of claims on your premium. Insurance is designed to protect you from catastrophic loss not as a maintenance policy. Turning in small claims all the time will inevitably impact your premium and hurt you in the long run. Higher deductibles not only save you a little bit of premium but they also discourage you from turning in small claims.

You also need to remember that insurance settlements for vehicles are typically done at an Actual Cash Value basis (unless your policy specifies Agreed Value or Replacement Cost loss settlement. These types of settlements for auto policies are not standard.) It is a good idea to check a third party source to determine if the value of your car is worth paying premium for comprehensive and collision coverage. If your vehicle is only worth $1,000 and you carry a $500 deductible then the most you could receive from insurance at a time of total loss would be $500. Would that be worth paying $200 or more every 6 months to include that coverage on your policy?