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Understanding Auto Insurance Deductibles and Premiums

06/25/2022

All auto owners in California must comply with the state mandate for insurance coverage. The minimum auto insurance requirement for California is liability coverage. The coverage requirements start with a minimum of $15,000 per injury or death in an accident with a maximum of $30,000, and auto owners need $5,000 of coverage for property damage. Auto owners select auto insurance policies according to annual deductibles and monthly insurance premiums.  

What Are Monthly Premiums?

Monthly premiums are the payments that auto owners give to the insurer to protect their automobile. The insurer calculates the total monthly premium based on the automobile’s value and specific factors related to the auto owner.

The owner’s driving record, where they live, how often they drive the vehicle, as well as their age, gender, and credit scores are all factors insurers consider. Insurers classify drivers under 25 years old as the riskiest drivers on the road, and these drivers pay more for insurance. Drivers with moving violations or accidents on their driving record are high-risk drivers and see increased premiums.

Statistics show that women are involved in fewer auto accidents, and some insurers consider this factor when calculating the premiums. In contrast, Fresno drivers over 65 pay the least for insurance coverage. Drivers with the highest credit scores see lower-than-average auto insurance premiums.

What Are Insurance Deductibles?

Insurance deductibles are the amount the policyholder must pay when filing a claim, and the insurance won’t pay anything until the auto owner pays their deductible. The policyholder finds details about the deductible in the insurance policy’s terms.

Some auto policies have more than one deductible, and policyholders must review the policy before submitting a claim to find out if the policy has additional deductibles. For example, what some insurers refer to as “full coverage” is comprehensive and collision insurance provided in one insurance policy.

Comprehensive coverage applies if someone steals the automobile or it sustains damage due to events that aren’t a collision. The policy replaces the vehicle if insurers deem the automobile a total loss. It also covers the vehicle if the damage resulted from vandalism, fires, or falling debris, such as tree branches or hail.

Collision coverage applies to auto accidents, collisions with objects such as fences, and vehicle rollovers. Policyholders with an auto loan financing the vehicle must have both comprehensive and collision insurance coverage. Auto loan terms require both policies to protect the lender’s interests, or the lender might repossess the vehicle. The policyholder has a separate annual deductible for collision and comprehensive policies. If circumstances arise where they need coverage for events listed in each insurance policy, the owner pays both deductibles.

How to Save On Insurance Premiums

A quote from insurance services shows auto owners how much they can save on monthly premiums. Fresno auto owners turning 25 will see immediate discounts and lowered premiums. Teen drivers can see reduced premiums by achieving higher grade point averages. A car insurance policy that applies to multiple vehicles offers discounts on premiums through multi-car discounts. Some insurers offer a safe driving discount after the policyholder maintains a safe driving record for the first year of coverage. 

Umbrella policies are helpful for policyholders who want to reduce their monthly auto premiums. The policies offer savings on auto coverage, boat coverages, homeowner’s insurance, and liability coverage for rental property owners. A free quote for the umbrella policy shows the policyholder how much savings they receive for switching.  

How Does the Deductible Affect Monthly Premiums?

Auto owners in Riverdale pay lower monthly premiums for their auto coverage if the policyholder increases the policy deductible. The savings opportunities are ideal for customers who can pay a higher deductible without financial difficulties. On average, increased deductibles range between $500 and $1,000.

A higher deductible offers short-term savings for policyholders with more modest incomes. However, if they’re involved in an accident, they must pay the total deductible before the policy offers any coverage for the accident. Policyholders who are at fault in an auto accident must pay the deductible before their insurer sends any funds to the victims involved in the accident. Vehicle owners are encouraged to discuss the pros and cons of different deductibles with their agent.

Where to Get Auto Coverage

At Academy West Insurance, we offer competitive auto insurance premiums and help policyholders save as much as possible in monthly premiums. Our agents answer all customer questions and help clients select the best insurance policies to protect their assets. Auto owners can find out more about our policies or get a free quote by contacting an agent now. 

Contact Information
Academy West Insurance 559-206-0494
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