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
