Written by Meg

Deductibles aren’t as easy as a “one size fits all” solution. Then again, it’s never that way when it comes to your car insurance.

So, how do you really figure out how much your deductible should be? That comes down to asking yourself some key questions on how you expect your insurance to fit into your life.

For starters, what’s your family life like? Are you single? Married? Kids or no? If so, how many? This can point you to either a higher or lower deductible, depending. Let’s say you’re married with no kids, and you both work. You may opt to have a higher deductible because you pay less in insurance costs now, and can easily handle the higher amount if something ever happened.

How’s your financial situation look? This may or may not be a more important factor in your decision than your family life. Do you have enough savings set aside for emergencies? Would you be able to handle a $1,000 deductible in case something happened?

If you can’t, it may be easier for you to pay a higher amount each month to have a $250 deductible, or even no deductible, if it would leave you in a bad position if something ever happened.

Another factor to consider is your car’s age. Is it even worth it to carry comprehensive or collision on it? Would even a tiny incident total the car? This is the case for many older cars, in which case paying for a low deductible makes little sense, you’d never use it — they’d simply total your car!

That does not mean, however, that you don’t need insurance on an older car at all…. Always make sure you have adequate medical coverage, just in case. One lawsuit can ruin you financially if you don’t have enough coverage in that regard.

All in all, it comes down to your risk tolerance — Would you rather spend a bit extra every month to know that you’re covered more in case of misfortune, or would you be able to float a $1,000 in case of an accident with no stress?

Whatever the case may be, periodically evaluate your deductibles compared to what’s going on in your life. Only you can answer how much insurance is right for you and your life.

If you compare your car insurance quote with someone else’s, you may notice big differences.  Why do the rates differ?  Here is a quick overview of some of the factors.

Every car insurance company quotes their rates based on three factors:

• The car
• The driver
• Their goals for their portfolio

How your car affects your car insurance quote:

• Cost to repair (in case of a collision), which depends on:
  • Original cost (expensive cars have expensive parts)
  • Competition among repair shops (the more independent repair garages and Ford dealers there are in your area, the lower the quoted labor cost to fix your Taurus)
  • Availability of parts (if the parts have to be shipped from Europe or Asia, they may cost more)
• Cost to replace (in case of a collision or theft)
• Likelihood of theft:
  • Does the car have a smart-key ignition lock? Can it be hotwired easily?
  • Is the car a popular 4-year-old that is valuable as spare parts?

How you affect your car insurance quote:

• Your driving record:
  • The longer you’ve driven safely, the less likely you are to crash your car
  • The more traffic violations, the less the insurer will trust you
• Likelihood of collision:
  • Do you live in a crowded city or a wide-open countryside?
  • How far do you drive daily?
  • Your driving record – how many collisions and violations in recent years
  • Your age and gender: statistically, young men are likely to speed and crash
• Likelihood of fraud:
  • Do you need the money? Do you need to get out of your loan or lease commitment?
  • The insurance company may consider your credit score in setting your rate.
• Likelihood of theft:
  • Are many cars stolen in the neighborhoods where you live or work?

How your insurance company’s goals affects your car insurance quote:

• Every company wants to insure people who pay premiums promptly and won’t make claims.
• Some companies want to avoid the riskier situations, so they set lower rates for the best drivers and much higher rates for the riskier drivers.
• Some companies are willing to take the risks, so they set their rates somewhere in between – so they attract the riskier drivers, but find ways to still make their profit.

You could change cars or move to another region to change your car insurance rate.  But you can do something straightforward, at no cost, before you renew your car insurance: Get some competitive quotes.  Different car insurance companies charge different rates, to manage their portfolios.  Find a company that will charge you a lower rate.  For example, carinsurancequoter.com lets you obtain quotes from a family of insurance providers – at no cost or obligation.  We let you obtain quotes from a family of insurance providers.

By Meg

It’s unfortunate that I can talk about this, really, but I’ve been there. In July of 2009, my S2000 was t-boned during what pretty much was a normal afternoon… The rest of the summer was anything but, after that point.

The damage was fairly extensive, and my husband and I were on pins and needles for almost two weeks before the adjuster came out to take a look at the car. We had no idea how much the damage was, and we were very much afraid that she would be totaled.

Thankfully, she wasn’t. The repair bill came back around $6,000 if I remember right, minus our $500 deductible. One thing I made sure we did was opt to get the insurance settlement ourselves and then find a body shop, not let the shop get paid directly. It was decided that it would be better off for us to do it this way. (Note: every situation IS unique, examine your own circumstances and come to your own conclusion. Perhaps the convenience is more important to you.)

We’re both big car nuts, so buying car parts is normal for us. It also means I have a fairly extensive knowledge of how much certain parts go for. The night of the accident, I was already on eBay and had already purchased a used passenger side door for our S2000.

While insurance was put-putting along with their settlement paperwork, I was busy collecting replacement parts: the new door, a new window, new door sills, a new set of side view mirrors, pricing out quarter panels and looking into reputable body shops to do the work. In fact, I figured if I saved a bunch of money on parts we could have a better shop do the work than we originally might have been able to, had we let them find the parts. (Reminder: It’s worth it to pay a body shop more money for a better job than to get it done cheap.)

In the end, the parts I collected and the work that we had done at the body shop came in just under the settlement amount — Meaning we were something like $100 in the positive and the car was completely back together. When I looked back at what the adjuster had put together, it kinda made me laugh — insurance companies look at what the “going rate” is for used parts, if available, and if not used they’ll use brand new OEM prices. Either can be quite outrageous!

Simply doing a bit of research yourself can save you quite a bit of money, and if you drive a fairly common car, it’s even easier.

Don’t wait for bad news to look into it — Go ahead, surf eBay today and price out some used parts for your car. I bet it’s cheaper than you thought it would be.