Basic Car Insurance Terms >> POLICY PERIOD and DEDUCTIBLE

POLICY PERIOD Your insurance coverage is only in effect during the period specified in your policy.

Typically, auto policies are in effect for six months or one-year terms. When you are shopping for insurance, be sure you know the policy period.

DEDUCTIBLE a deductible is the amount of money that you pay BEFORE the insurance money kicks in. Let’s say you back your car into a tree. Your insurance has a $250 deductible (which is low). If the repair bill is less than $250, you pay for the whole thing.

But if the repair bill is over $250, then you pay $250 and the insurance company pays the rest.

(This depends on your coverage.) If a lower deductible means that you have to pay less money out of your pocket, why not have the lowest deductible possible? The answer is money.

With a lower deductible, the insurance company is at greater risk of paying for repairs, so they will charge you MORE for the policy.

Basic Car Insurance Terms >> POLICY PERIOD and DEDUCTIBLE