MBR Financial, Inc.
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Houston, TX 77027
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281-974-2108
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What do I need to know about the deductible on my auto insurance?

An auto insurance deductible is more than just a number. It represents the financial responsibility you have agreed to accept in the event of a covered loss. You and your insurance provider agree to share the risk, up to policy limits.

Say you're in an accident and there is $2,500 worth of damage to your vehicle. You have a $500 deductible. This means you pay $500, while your auto insurance company pays the remaining $2,000. Note that deductibles may not apply in all situations.

You might consider raising your deductible in order to lower your auto insurance premium. Generally, the higher the deductible you choose, the lower your premium cost. Be careful, though--the higher your deductible, the more you'll need to pay out of pocket toward repairs when you have a claim. You'll want your deductible to match with your budget so you will not have to worry about covering more than you can afford in the event of an accident.

Besides your budget, you should also think about your vehicle's overall value when choosing your deductible. Typically, auto policies have separate deductibles for collision and comprehensive coverages. For example, if your vehicle is damaged due to an accident or an event other than a collision (fire, vandalism, theft, or natural disaster), then you pay the corresponding deductible you chose for comprehensive coverage. But if your vehicle is older, it might not be worth repairing damage. In this case, you might decide to choose higher deductibles or even reduce or eliminate collision and/or comprehensive coverage.

You should feel comfortable with the financial risk represented by the deductible on your auto insurance and understand how to balance the risk with the cost of your premium. Take time to review your deductible amount, typically located on the declarations (front) page of your auto insurance policy. Choosing an appropriate deductible could help you cope with the stressful aftermath of an accident.



IMPORTANT DISCLOSURES Broadridge Investor Communication Solutions, Inc. does not provide investment, tax, legal, or retirement advice or recommendations. The information presented here is not specific to any individual's personal circumstances. To the extent that this material concerns tax matters, it is not intended or written to be used, and cannot be used, by a taxpayer for the purpose of avoiding penalties that may be imposed by law. Each taxpayer should seek independent advice from a tax professional based on his or her individual circumstances. These materials are provided for general information and educational purposes based upon publicly available information from sources believed to be reliable — we cannot assure the accuracy or completeness of these materials. The information in these materials may change at any time and without notice.

Prepared by Broadridge Investor Communication Solutions, Inc. Copyright 2019.