Good insurance is one of the best assets a truck driver can have. Insurance for commercial truck can be complex, so it’s important to learn about all the details involved before you settle on a policy.
Deductibles are an important part of any insurance policy, and they affect how much you pay each month and in the case of an accident. Here’s an overview of what they are and how they work.
What Are Deductibles?
Every insurance policy has deductibles, and truck insurance is no exception.
A deductible refers to the money you must pay out of pocket before insurance begins to cover the cost of the damage from an accident. Deductibles can get complicated when it comes to healthcare and dental, but they’re fairly straightforward in the automotive sector.
Let’s say you get into an accident, and the damages will cost $10,000 to repair. If your deductible is $2,000, you’ll pay that $2,000, and the insurance company will cover the remaining $8,000.
However, if you get into an accident where the deductible is greater than the cost of repairs, you won’t need to file a claim. Instead, you’ll be responsible for the entire cost of repairing the damage.
Why Do Insurance Policies Have Deductibles?
Deductibles may seem mysterious, but they serve an important purpose.
For one, they help deter potential bad actors who may otherwise drive recklessly in hopes of an insurance payout. Deductibles ensure that they have to shoulder some of the cost of an accident.
Deductibles also reduce the number of claims companies have to process. That way, insurance policies will cover major losses and damage, like they are intended to do, but the companies won’t need to deal with every minor fender bender policyholders are involved in.
How Do You Choose a Deductible?
Your deductible depends upon the insurance policy you choose. It’s a personal choice, and it’s all about balance.
Some people choose a higher deductible to lower their monthly insurance rate. That means you pay less on a monthly basis, but in the case of an accident, you will end up paying more out of pocket than someone with a higher monthly premium.
Since you will have to pay your deductible from your own money, take your finances into account. Be sure to choose a deductible that you can afford to pay without putting too much stress on your savings.
You’ll also want to consider your own accident history. When did you last have an accident? That can be an indicator of how likely you are to have an accident in the future.
Try doing some calculations to compare your savings on your monthly premium to the cost of your deductible. If you go five years without having an accident, for example, will you save enough money by paying lower premiums for those five years to justify paying a higher deductible?
At SoCal Truck Insurance, we aim to protect people and their vehicles. We have connections throughout the auto industry, from repair shops to rental services, to better provide for our customers.
For affordable and dependable insurance for truck drivers. Contact us at SoCal Truck Insurance today.