Auto Insurance with No Deductible: Is it Worth It?

Finding an auto insurance plan with no deductible is a tempting idea for many consumers, and a popular option in countries such as Canada. For those in the United States, it still can be possible to find a plan that requires no out-of-pocket money in the event of a car accident or auto theft, but is it really worth it?

The way auto insurance typically works is that the insured must pay a deductible before his or her policy benefits go into effect. For example, if someone else hits your car, you still have to pay as much as $1,000 depending on your plan before your auto insurance company will pay for any repairs on your car. Coming up with $1,000, which could be reimbursed later by the other insurer if the accident was not your fault, can be a difficult task in today's economy. This is why it is so tempting to find auto insurance with a zero deductible.

The problem with this kind of policy is that the monthly premiums are typically higher than the potential upfront deductible money saved. In addition, many auto insurance companies do not offer these plans because they are potentially high-risk. Anyone who has had claims or even basic traffic tickets may not be eligible for this insurance, because it has such a potential impact on their profits. Insurance companies make money off requiring deductibles, and are never any consumer's friend.

The best thing to do is find a low deductible auto insurance plan. Deductibles of $100 to $500 are available, and a $250 or $500 deductible could easily be covered in the event of an emergency with quick cash payday loans if necessary. There are also plans that do not require any upfront payment in the event of vandalism or auto theft, which can be helpful to those who live in a higher-crime city.

Overall, having a low deductible is an important element of any auto insurance plan, but having zero deductible car insurance is probably not feasible or financially worthwhile in the long run for most Americans. While accidents, vandalism, and car theft are unfortunately unavoidable in some people's lives, the financial expense and qualification requirements for auto insurance with no deductible is many times just not worth it. Finding an insurer who is offering low deductibles and even no deductible in the case of vandalism or car theft is usually the most sensible choice.