Re-posted on 6/22/18
The whole point of paying for insurance is so that you don’t have to shell out tons of cash if you get into a fender bender, right? So why is the shop telling you that you’re going to have to pay up before they fix your vehicle?
When signing up for your auto insurance policy, you selected a deductible. This is the amount of money that you pay towards your repair costs in the event of an accident. In other words, say that your car sustained $3,000 of damage and you have a $500 deductible. You’ll pay that $500, and your insurance will cover the rest.
The reason for the deductible is for you to have some skin in the game, to reduce overall, the number of total claims, and for the insurance company to “cost-share” some of their losses.
Generally speaking, the higher your deductible, the lower your premium. If you have a $1,000 deductible, you’re less likely to file an insurance claim, making you less risky to insure. That high deductible/low premium comes with a price though; namely, the price of your deductible. So if you choose a $2,500 deductible because you like the low monthly premium, and you get into an accident that requires $2,500 in repairs, you’ll pay for every dime of it out of your own pocket.
Bottom line: a high deductible is only a good idea if you can actually afford to pay it. Talk to your insurance agent to ensure that your coverage, including your deductible, is right for you.