An auto insurance policy is made of many different components that help protect you and your car. The limits and deductibles you choose are two parts that have the most impact on your premiums.
By understanding your auto insurance coverage limits, you can tweak your limits and/or deductibles to provide the level of protection, and cost, that fits your lifestyle and particular financial situation.
Your coverage limit is a pretty simple idea. It's the highest dollar amount we'll pay if you make a claim on a "covered loss." (That's insurance-speak for claims that fall within the bounds of your policy.) You choose the amount of coverage you want, but remember:
- A higher coverage limit means a higher payout to you on a covered loss. For that added protection, it also means that your insurance policy payments will be more expensive.
- Lowering your coverage limit may be a good way to save money on your policy premiums now, but if you have an accident, you may need to pay more out-of-pocket costs afterward.
The deductible is your portion of the out-of-pocket claim cost you agree to pay when you make a claim covered by your policy. For example, if you're in an accident resulting in $1,500 in damage to you car and you have a $500 deductible, you pay the first $500 and we pay the remaining $1,000 to get your car back on the road.
When you set your deductible, keep in mind that:
- The higher your deductible - the lower your auto insurance premiums will be.
- By lowering your deductible, it means that you'll pay less out-of-pocket costs when you make a claim, but you'll pay more in your regular policy premiums throughout the year.
Lower premiums and higher out-of-pocket expenses? Or vice versa? There's no "one size fits all" answer for car insurance limits & deductibles, but Allstate agents are always available to talk about your situation and/or lifestyle, outline the options that may be best for you, and explain what your preferred choices might mean for your policy premiums. We're here to help you, so feel free to ask any questions - even if you think they may not be important. You could be surprised.
In fact, once you explain more about your coverage needs, you'll have to make similar decisions for other aspects of your auto insurance policy, too. Learn more about our other coverage options.
Or if you're ready, take a few minutes to get an estimate of your premiums and how Allstate might save you money with an easy online quote, talking to a local Allstate agent or simply calling 1-800-ALLSTATE (1-800-255-7828).