Understanding This Key Part of Your Auto Insurance in Georgia

Have you ever looked at your auto insurance policy and seen the word "deductible"? It might sound a little confusing, but it's actually a pretty simple idea that can affect how much you pay for your insurance. Let's break it down so you know exactly what it means and how to choose the right amount for you in Georgia.

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What Exactly is a Deductible? Think of it Like This...

Imagine you're going to get your phone fixed, and the repair costs $200. If you have a $50 deductible, it means you'll pay the first $50, and the phone repair shop (or in our case, your insurance company) will pay the remaining $150.
 

That's basically what an auto insurance deductible is! It's the amount of money you agree to pay out of your own pocket when you file a claim for something like damage to your car after an accident. Your insurance company then helps cover the rest of the costs (up to your policy limits).

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How Does Your Deductible Change What You Pay for Insurance (Your Premium)?

Here's the important part: the amount of your deductible has a direct impact on your insurance premium – the regular payments you make to keep your insurance active.

• Higher Deductible = Lower Premium: If you choose a higher deductible, like $500 or $1000, you're agreeing to pay more out-of-pocket if something happens. Because you're taking on more of the initial cost, the insurance company will usually charge you a lower premium each month. Think of it as them giving you a discount for taking on more risk.

• Lower Deductible = Higher Premium: If you choose a lower deductible, like $100 or $250, you'll pay less out-of-pocket if you have a claim. However, since the insurance company will be paying more of the initial cost, your monthly premium will usually be higher.
   

So, How Do You Pick the Right Deductible for You in Georgia?

Choosing the right deductible is a personal decision, and there's no single "right" answer for everyone. Here are some things to think about to help you decide:

• Your Budget and Savings: Can you comfortably afford to pay a $500 or $1000 deductible if you had an unexpected accident? If you don't have much savings, a lower deductible might give you more peace of mind, even if your monthly premium is a bit higher.

• How Often Do You Think You Might File a Claim? If you're a very careful driver with a clean record and you don't drive much in risky situations, you might feel comfortable with a higher deductible. If you drive in a busy area or are worried about potential incidents, a lower deductible might be a better fit.

• Your Tolerance for Risk: Are you okay with the possibility of having to pay a larger amount upfront if something happens? If so, a higher deductible could save you money on your monthly payments. If you prefer to have more predictable, lower out-of-pocket costs in case of an accident, a lower deductible might be the way to go.
   

Let's Look at a Quick Example:

Imagine you have two insurance options:

• Option A: $250 Deductible - Your monthly premium is $150.

• Option B: $750 Deductible - Your monthly premium is $120
  With Option A, you'll pay more each month, but you'll pay less out-of-pocket if you have a claim. With Option B, you'll save money on your monthly payments, but you'll need to be prepared to pay $750 if you have an accident.
   

Important Things to Remember for Georgia Drivers:

• Your deductible usually applies to collision and comprehensive coverage. Liability coverage, which pays for damages you cause to others, typically doesn't have a deductible.

• Always make sure you understand what your deductible is for each type of coverage on your policy.
   

The Bottom Line:

Choosing the right auto insurance deductible in Georgia is about finding a balance between what you can afford to pay upfront if you have an accident and how much you want to pay for your insurance each month. Think carefully about your financial situation and your comfort level with risk.
 

Still not sure what deductible is best for you? Our friendly team at ATI is here to help! Give us a call today at 404.875.4700 to discuss your options and get a free quote.