Everything you need to know about insurance basics, like coverage types, limits, cost and more.
Scenario: A tree branch crashed down on the hood of your car during a thunderstorm.
You take your car to the mechanic and find out it’s going to cost $1,500 to fix it. Since you chose comprehensive coverage with a low deductible of $250, you’ve been paying a little more each month for your premium and will only be paying $250 out of pocket for the damage. Your insurance company covers the remaining $1,250.
Scenario: You hit a tree with your car.
Now, let’s say you hit a tree with your car, which is covered under your collision coverage. You wanted to pay less on your monthly premium and selected a $1,500 deductible for your collision coverage. The estimate to repair the damages on your car is $1,500 — the same as your deductible. In this instance, it wouldn’t make sense to file a claim since the amount you’re paying for your deductible would be the same amount to cover the damages on your own. By the time you paid your deductible, there wouldn’t be anything left for your insurance provider to cover.