Higher Deductible, Lower Monthly Cost for Insurance

The majority of insurance operates under the stipulation of deductibles and claim benefits. Depending on how much coverage and how much is paid a month, a set cost is associated with different claims. It is most common for insurance policies with lower deductibles to have higher monthly payments.

The reason behind this is because lower deductibles mean that the insurance company will have to pay more upfront. When considering how to save money on insurance premiums, a wise consideration is to look at the cost of deductibles. Raising the deductible only slightly is likely to have a substantial impact on the monthly premiums.

In an economy where many people are living paycheck to paycheck the risk associated with higher deductibles seems reasonable. While in the case of an accident or repair situation the policyholder would experience increased cost the monthly savings will be worth it. Also, safe drivers usually operate under the premise an accident won’t happen to them.