When you get your auto insurance bill and look over the list of coverages, you’re not alone if you find it confusing. One of the things listed is a deductible on your collision or comprehensive coverage. Many people don’t understand what their auto insurance deductible is or how it affects their policy.
A deductible is the amount the policyholder has to contribute toward fixing damage to his or her vehicle. For instance, if an incident results in $3,000 worth of damage to your vehicle and you have a $500 deductible, the insurance company will pay the remaining $2,500 after you’ve paid the required $500.
What many people don’t know is that they can adjust their deductible, which will affect the price of the policy. A very high deductible will lower the premium, since the insurance company knows that you are going to pay a larger portion of the repair bill should you have an accident. Conversely, a very low deductible will result in a higher premium.
How to Determine the Amount of Coverage You Need
You still run the risk of a substantial financial loss if you purchase an umbrella policy with inadequate coverage. Many insurance agents advise purchasing a policy that is at least double the total value of all your assets combined. This includes your house, cars, retirement and personal savings accounts, valuable jewelry or antiques and anything else worth a substantial amount of money. If you are unsure of the value of some items, consider having them professionally appraised. This ensures that you have the financial protection you need in case of a lawsuit or other serious threat to your well-being.
Protect your family’s interests. Call Texas Insurance Agency at (713) 675-2626 for more information on Houston umbrella insurance.