What Is a Deductible?

The deductible is one of the two major payments made for auto insurance – the other being the premium. While the premium is paid monthly for coverage, the deductible is the amount you have to pay out of pocket following an accident. It’s the amount of damage for which you personally are responsible.

The cost of the deductible is usually determined by the premium. Typically, a higher premium, translates into a lower deductible. If you are more concerned with saving money in the short-term, a high deductible might be preferable. If you are interested in paying less in the eventuality of a serious accident, then a low deductible may be better.

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