Car Insurance Deductible

Reader’s Question:

Will I get high car insurance rates on a financed vehicle if I have low deductible?

Nicole

Yes, if you have a lower deductible for your physical damage insurance coverages on your financed car generally means that the car insurance rates will be a little higher.

An insurance deductible is the amount of the loss that you, the policyholder, is liable to pay out prior to benefits from the insurance provider are payable. If you’re spending more for the restoration of your car this means the vehicle insurance provider will pay much less, saving them profit the long run. This enables an automobile insurance provider to charge you much less for a policy with higher deductible amounts.

The lien holder on your loaned car might have put a limit in your finance documents of what your vehicle insurance Comprehensive and Collision (full coverage) deductibles could be set at. Lien holders usually need a $250 or $500 deductible.

The financial institution requires specific deductible amounts if they don’t the vehicle owner might set the deductible amounts higher, to save cash, however struggle to pay the deductible if your claim has to be made. If something occurs with their property, the vehicle, the lien holder would like the deductible to be fixed at a decreased amount that you need to have the ability to pay for and the fixes will get done.