WHY DO CAR INSURANCE COMPANIES HAVE DEDUCTIBLES?
Let’s say your car is damaged and your insurance company asks you to pay a $500 or $1,000 deductible to get it fixed under your Comprehensive/ Collision coverage. Why do they do that and is that fair? Actually, deductibles are a way to make car insurance work better. Here is how:
MAKES PROCESS MORE EFFICIENT - Let's say there were no deductibles, then a person could open up a claim for any damage…even really small ones like a scratch. The process of opening a claim, assigning an adjuster, having a body shop fix it, etc. would be a lot more costly than the actual repair itself…leading to even higher premiums.
DRIVERS ARE MORE CAREFUL - Having to pay a deductible can motivate a driver to be a more careful driver or avoid damages to their car.
LOWERS INSURANCE COSTS - Without a deductible, drivers would have to pay a lot more in insurance to make up for the higher claim costs. Plus customers have the ability to increase their deductibles as a way to help them find the right balance of price and coverage.
Note that not all auto claims involve deductibles so if you have an accident, we recommend you consult with your insurance professional to review your options. If you are our customer, please call our Bell Gardens office at 323-773-4429 to get assistance.