Facts about Coverage Limits & Deductibles

Finding a low rates car insurance policy that is right for you require more than understanding your coverage needs; it's also important to know how much coverage you need. Here is an explanation of coverage limits and deductibles and what they mean for you.

Coverage Limits

The higher your coverage limit is on your low rates car insurance policy, the more protection you will have in the event of a covered accident. On the other hand, reducing your coverage limits will lower the premiums on your low rates car insurance policy. Here are some facts about coverage limits:

• Your low rates car insurance coverage limit is the highest amount your insurer will pay when you make a claim on a covered loss, meaning any losses that are covered by your policy.
• The higher your coverage limits are, the more your insurer will pay, but you will also pay higher premiums to enjoy this coverage.
• You can reduce your low rates car insurance premiums and save money in the short-term by lowering your coverage limits, even if you have higher out-of-pocket costs later after an accident. Before you reduce your coverage, make sure you could afford to absorb the higher out-of-pocket costs you would face.

Deductibles

Keeping your deductibles high can help keep your low rates car insurance premiums down. Alternately, lower deductibles (and higher premiums) mean lower out-of-pocket costs when you file a claim. Here are some facts about deductibles:

• A deductible is the amount of money you agree to pay out-of-pocket (meaning your own money, not the insurer's) if you make a claim that is covered by your low rates car insurance policy.
• For example, if the repairs to your vehicle cost $1,500, and your deductibles were set at $500, your insurance company would only pay $1,000 toward the cost of the repairs because you are responsible for the first $500.