My friend’s cousin had her car stolen. It was all decked out with TVs and DVD players. When she got it back, all of that was gone and the paint job was messed up. She didn’t have insurance on her car so nothing was able to be replaced. If you don’t think you need insurance, just look up how many car accidents and stolen cars there are every year.
A popular means to reduce your monthly car insurance premium amount is to raise the insurance deductible. Let us explain the deductible. Suppose you had met with an accident and the fault lies on you. You are shelling some money from your pocket at the time of insurance claim. This amount is said to be a deductible.
Though one might be tempted to increase the deductible for getting a lesser monthly premium, you must be able to set aside an amount equal to deductible to be used in the event of an accident else you must wait till you raise that amount. Once you have set aside the necessary amount equal to the deductible, there are other things you have to consider like your driving habits and the chances of a car accident.
Your car driving habits has a significant influence on your insurance expenses. For a safe driver, increasing deductible will be beneficial as he can stay long periods without an accident and the opposite is with an unsafe driver who meets with accident often, it does not worth raising the deductible. Also getting an accident just after raising your deductible ends up in loss like in the following example.
As long as you return home with your car without involving in any accident, the money reserved is safe in your hands. Immediately after raising the deductible you are hit, all reserves will go in drain.
A small working example will enable you to understand and decide. Suppose you increase your car insurance deductible from $500 to $1000 and you get a reduction in your monthly car insurance premium @ $12.50. This savings of $12.50 per month works out to a period of 40 months to sum up to that increased $500. You are bound to keep off from any accident for all these 40 months. A longer period indeed, to practice a safe driving. Look back to your previous history of your driving habit. If the record is clean your choice will be wise. Otherwise try to change yourself while on the wheels.
Now you have the full confidence to sit on the wheels for 3 long continuous years without any incident. Be sure that you are not alone on the road and you have to face a lot of reckless drivers unmindful of other vehicles. Increase in number of vehicles in the years ahead of your insurance signing, shall also to be made note of. Also if you are not in a country side, reconsider your decision to go for higher deductibles, as you need to plough through the congested urban roads.
Graham McKenzie is the content syndication coordinator for Carinsurancesa.co.za, a leading South African car and vechile portal.
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