What is a Car Insurance Deductible?

[car8788]

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I am newbie in this forum please give me some comments for my question.

What is a Car Insurance Deductible?

What is a Deductible in Car Insurance?

A deductible is on a car insurance policy is more than just a fee you pay in the event of a car accident. A deductible is also a way to lower an insurance company's risk and legislate an auto policyholder's premium. So, in other words, a deductible is a component of an auto insurance policy that effects it and you in a big way.

Types of Coverage

Everyone who drives needs car insurance. In fact, most states require it by law. When you buy car insurance, you are buying what is called a policy. Your policy is based on a variety of factors including what kind of car you drive as well as what kind of insurance you want. Auto insurance policies are actually a package of different types of insurance coverage.

The first step in understanding an auto insurance policy is to learn the various types of coverage insurance companies offer. Some of this coverage may be required by your state and some of the coverage may be optional.

* Liability - This coverage pays for accidental bodily injury and property damages to others. Injury damages include medical expenses, pain and suffering and lost wages. Property damage includes damaged property and automobiles. This coverage also pays defense and court costs. State laws determine how much liability coverage you must purchase, but you can always get more coverage than your state requires.

* Collision - This coverage pays for damages to your vehicle caused by collision with another vehicle or object.

* Comprehensive - This coverage pays for loss or damage to the insured vehicle that doesn't occur in an auto accident. The types of damages comprehensive insurance covers include loss caused by fire, wind, hail, flood, vandalism or theft.

* Medical Coverage - Pays medical expenses regardless of fault when the expenses are caused by an auto accident.

* PIP - Personal Injury Protection (PIP) is required in some states. This coverage pays medical expenses for the insured driver, regardless of fault, for treatment due to an auto accident.

* Uninsured Motorist - Pays your car's damages when an auto accident is caused by a driver who doesn't have liability insurance.

* Underinsured Motorist - Pays your car's damages when an auto accident is caused by someone who has insufficient liability insurance.

* Rental Reimbursement - This type of coverage will pay for a rental car if your car is damaged due to an auto accident. Often this coverage has a daily allowance for a rental car.

Many insurance policies combine a number of these types of coverage.

More @ HowStuffWorks "How Car Insurance Works"

[maxjlone]

I think that Car insurance is not only a necessity when driving a car, it is also the law. Most car insurance companies provide deductible calculators on their website. Before you decide which deductible you will use, compare policies and how much each costs. The purpose of the car insurance deductible is to dissuade drivers from using their insurance policies for minor claims. If a driver has $500 in damages, and a $500 car insurance deducible, he most likely will not make a claim.
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