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An Insurance Policy with a High Deductible May Be the Smarter Choice

A magnifying glass focusing on the word deductible to illustrate how insurance policy has a high deductible.

Any insurance that you get is supposed to keep your payments to a minimum, whether you’re getting health insurance or auto insurance. However, knowing which payment plans to choose is considerably difficult because you don’t know what claims you’ll be making in the future. You can’t guess what accidents will happen this year, but you can prepare for it by being properly insured with a policy or plan that you can comfortably afford.

Traditional health insurance plans typically come with a co-pay and deductibles system that aim to keep your medical bill payments maintainable. Another option would be to purchase a high deductible plan where you will have to pay a high deductible, typically at least $1000 minimum, before your insurance will pay for any other medical expenses at 100 percent coverage. This high deductible option might be a better option than higher premium traditional insurance if you have many expensive doctor or other medical visits during the year.

One major difference between car insurance deductibles versus health insurance deductibles: the entire deductible has to be paid each and every time there is a claim, not just once annually.

Having a high deductible plan will save you money in the form of lower premiums. You can create a list of events that may happen and how much you would have to pay in each scenario to see which option is more ideal for your situation. Having a high deductible plan may ultimately save you money.

With auto insurance, there isn’t a separate high deductible plan to choose from. You do have the option of choosing what deductible amount you’d like to go with on your auto insurance policy, though. Having a higher deductible amount on your policy usually means that you’ll be paying a lower monthly premium.

Auto insurance will protect you either way, whether you want to pay low monthly premiums and pay a large out-of-pocket deductible or pay higher monthly premiums and pay a small out-of-pocket deductible. In 2012, the average auto insurance liability claim for property damage was $3,073 and the average for bodily injury claims was $14,653.

There’s no way around it: Having high deductibles on your car or health insurance policy will mean paying more out of pocket costs. But high deductibles also mean lower rates for your monthly insurance payments.

Talk to your insurance company to find out which auto insurance policy and deductible amount is best for your needs and to see your options. Having a good and cheap auto insurance policy will save you from financial woes in the future as you can never predict what damages or lawsuits may come from accidents. Also talk to your health insurance agent to find out what plan is good for your situation. You can get more details on what the company can provide for your medical fees and how they can lower your overall annual doctor or medical bills. Know that you have options and there are insurance plans and policies for all lifestyles and financial situations.

Freeway Insurance offers low cost auto insurance and health insurance policies. Call (800) 777-5620 to speak with an agent and to get your free quote. 

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