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Risky Business

Know Your Deductibles

By Shelly Benisch, CIC w/ CIS (Commercial Insurance Solutions)
Posted May 23rd 2011 7:10AM

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Hi Everyone, with the number of deer hits and windshield replacements lately, I thought I'd talk about Deductibles.

To refresh your memory, "Comp", means "Comprehensive" on your policy, and it covers your vehicle for fire/theft/vandalism/hail storms/floods/animal hits and windshields.

Collision is when your vehicle hits another vehicle or flips over, hits a tree, guardrail, etc.

Deductible is what YOU pay out of pocket first, before your vehicle is repaired. 

Collision doesn't happen nearly as frequently as Comp.  Collision can easily take the entire value of your vehicle, but a Comp claim can still go from $4,000 to $25,000 for a deer hit.   

Weather damage, vandalism or theft are also comprehensive claims where you will need to pay your deductible, though the event is no fault of your own.

A high deductible feels good when you start the policy, but really hurts when you can least afford it. If you know you don't have $1,000 or $2,500 lying around in event of an accident, then be sure to choose a lower deductible, like $100, $250 or $500.

While it seems like a good idea to take a higher deductible when you buy your insurance policy to get the lower rate, in the long run, if you get into an accident and don't have the money to pay your deductible FIRST then you're in a pickle.

The pain of paying a high deductible far outlasts the joy of saving a few hundred dollars when your vehicle is damaged, you can't work...and you're trying to find the money to pay your deductible so it can be repaired. 

Protecting your assets is what insurance is FOR... Have your agent run proposals for you with various deductible options so you can decide BEFORE you buy your policy the most cost effective way for you to manage your money as an Independent Contractor Owner Operator.

Shelly Benisch, CIC w/ CIS (Commercial Insurance Solutions)

                  Shelly@myCISagent.com              www.MyCISagent.com

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