Unlike health insurance, car insurance deductibles are not annual. You are responsible for the deductible indicated on your policy each time you file a claim. The car insurance deductible is the amount of money you must pay when you file a claim for an insured loss. When you have a car accident and file a claim, your claim payment will be reduced by the amount of your deductible.
Deductibles vary by policy and driver, and you can choose your car insurance deductible when purchasing your policy. In the case of an accident that you did not cause, you can immediately file your claim with the at-fault driver's liability insurance to avoid paying a deductible in full. Your insurer will always want to pay the least amount of money possible, so if they discover that you are not at fault, they will request the reimbursement from the other driver's insurance company. If the damages exceed your deductible, your insurance company will issue you a check for the full amount of the damage minus your deductible.
Choosing an insurance deductible depends on the size of your emergency fund and how much you can pay for monthly premiums. Conversely, a lower deductible reduces your out-of-pocket expenses if you have a claim, but will result in a higher rate. It's important to consider these factors and other aspects of your situation to choose the right deductible for you. Car insurance policies are divided into several types of coverage, such as collision insurance which helps pay for repairs or replacement of your vehicle after an accident.
This type of insurance also helps pay for medical expenses after an accident involving an uninsured driver or with a driver who doesn't have high enough coverage limits. At the end of the day, part of choosing a deductible for your car insurance policy is making sure it's designed to fit what's comfortable for you.