How To Determine Your Car Insurance Deductible in Colorado

When shopping for auto insurance in Colorado, paying attention to the premium you’ll pay is important, but there are other costs to consider. One of the direct influences you can have on paying less for coverage is by choosing a higher deductible.

But you’re going to need to weigh many options before you make a commitment. As nice as lower monthly premiums may be, if you choose the wrong deductible, you may end up paying more in the long run.

Not all car insurance policies in Colorado come with deductibles. If you’re enrolled in liability coverage only, you won’t have a deductible to even consider. Yet, many other common policies will require you to cover a part of potential losses before receiving reimbursement.

It’s important to understand which coverages require deductibles, how they affect your rates, and the effect they can have on your protection. Below, we’re breaking all of this down and more to help drivers in Colorado make an informed decision.

Auto Insurance Deductibles in Colorado Explained

If you’re looking to determine how to choose your deductible, you’re going to need to know which coverages come with one. But first, you’ll need to understand what auto insurance deductibles in Colorado are for drivers.

A deductible is your financial responsibility. You pay an agreed-upon amount at the time of a loss and then your insurance carrier will provide reimbursement for your loss. Drivers will not receive compensation after filing a claim unless they first cover their deductible.

Deductibles are often provided in certain increments, meaning, you may be able to choose the deductible you pay for your policy between $500 and $2,000, but it will need to be an increment of $500. The amount you set as your deductible will also affect how much you pay in monthly premiums.

In general, higher deductibles mean lower premiums, but it’s important to keep in mind that this means coming up with a larger lump sum of cash after suffering a loss. This isn’t always possible for drivers, depending on your finances. Furthermore, a higher deductible may make it unfeasible for you to submit a claim in the first place.

For example, if you are in an automobile accident and need to repair your vehicle, if you have collision coverage, you’ll pay your deductible and then your insurance company will reimburse you for the rest.

Let’s say you have a total of $1,500 worth of damage but a deductible of $2,000. You wouldn’t be able to submit a claim because you won’t be receiving any reimbursement anyways. Furthermore, depending on your finances, it may be difficult to come up with such a sum of money unexpectedly. Meanwhile, your vehicle can’t be repaired and you’re stuck in limbo.

It’s important to consider all of the options available to you along with the factors at play before you enroll. Working with a licensed insurance agent can help you better understand our risks and find appropriate coverages and deductibles that meet your personal needs.

Which Types of Auto Insurance Coverages Require a Deductible in Colorado?

There are many different auto insurance coverages available in Colorado and each protects you and your property in a unique manner. But not all of the different coverages drivers can add to their policy will in fact come with a deductible.

While your coverage should be personalized to meet your needs, it’s not enough to know how your policy protects you but also how it works. Here are the coverages that come with deductibles, how they protect you, and the process of receiving reimbursement for your loss:

• Comprehensive coverage is available to help you restore losses to your vehicle that don’t involve car accidents. For example, if your car is under a tree that has too much snow on its branches, the branch breaks, and falls onto your vehicle.
• Collision coverage restores your own vehicle after an accident. Liability coverage is important to stay legal and to cover the damage to another party’s vehicle, but you’ll need separate protection for your own car.
• It’s worth noting that you may notice that full coverage auto insurance also comes with deductibles. But remember, full coverage is simply a combination of liability, comprehensive, and collision coverage into one policy bundle.
• If you enroll in uninsured/underinsured motorist (UM/UIM) coverage and submit a claim, there is also a deductible you’ll need to cover.

Both of these scenarios can leave you without an operating vehicle, leading to further hardships down the line. This includes getting around town for various errands, commuting to work, etc. Therefore, if you plan on submitting a claim, you’re going to need to first cover your portion in accordance with the deductible amount you choose.

Important Considerations for Choosing a Deductible in Colorado for Car Insurance

On the surface, having a higher deductible feels like a no-brainer. Not only do you not have to worry about it unless you have to submit a claim, but you’re also going to help lower your monthly car insurance costs. Here are some key things you’ll want to review before you dive in:

Other Factors Affect Your Premium

Choosing a higher deductible for a lower premium is a common choice, but it’s important to understand that much more affects how much you pay. While you may receive lower premiums with a higher deductible, there are many other factors each brand will consider.

Furthermore, each car insurance company is calculating your premiums in its own unique way. This means that some carriers are going to look at higher deductibles as a very important variable, worthy of big savings, and others won’t be as generous.

The best thing you can do is take a more well-rounded approach and compare premiums from many different carriers. You wouldn’t want to enroll with a carrier that offers a slight discount for a deductible that doesn’t suit your needs rather than finding the right coverage, better discounts, and a suitable financial responsibility for your budget.

Remember To Consider Your Finances

Everyone has different financial needs and while it’s easy to think about the short-term savings you may receive, don’t forget about the responsibilities that come with a larger deductible. If paying a little more each month is an issue, it’s likely that paying a couple of thousand dollars at once, suddenly, is even less feasible.

The Details of Your Auto Loan

In some cases, you may not have a choice. If you are financing your vehicle the best way how to determine your car insurance deductible in Colorado will simply be following the terms laid out by your lender. Not only do auto loans often require you to enroll in full coverage, but they may also dictate what your deductibles will be during this period.

Determine How Car-Dependent You Are

If you live in an area that has a lot of alternative travel options, lead a lifestyle in which you don’t often drive, or have multiple vehicles in your household, being without a vehicle isn’t as big of a deal. But if you rely on your car to get around, you’ll understand firsthand the importance of having a working vehicle.

Again, it’s tied to personal finances and circumstances that vary from person to person. If you can go without having a vehicle during the time it will take you to save the money for a higher deductible, the risk might be more tolerable. If not, you may want to stick to a lower deductible.

Risk Tolerance and Driving History

Managing your risks is at the core of insurance and understanding how much you can risk you can take on is important. Above, we spoke about some of these risks, including the financial aspect of paying higher deductibles or going without a vehicle, but there are other variables to remember.

If you are more prone to getting in accidents, having a lower deductible may be better for your needs as you’re more likely to file a claim. Even if you are a great driver, this is especially important for households with younger drivers as they are less experienced and more accident-prone than any other demographic.

Your Vehicle’s Value

The value of your vehicle is another important consideration as it can help determine the type of deductible best suits your coverage. More valuable vehicles will benefit more from lower deductibles whereas vehicles that are deprecated in value are typically recommended to enroll with a higher deductible.

How To Save On Auto Insurance and Choose the Right Deductible in Colorado

If you’re looking to enroll in car insurance, you’re going to need to assess the coverages you need for the risks at hand. Part of this process includes looking at your deductibles, your budget, and other factors that will help determine not only the level of protection for your vehicle but how to make it all come together.

Freedom Insurance Group prides itself on the partnerships we maintain with several top-rated carriers. By doing so, we help drivers like you save more because we have more options than singular brands.

Comparing various carriers is going to help you maximize your savings. You’ll be able to find more discounts, more bundles, and gain a wider view of what is available to protect yourself and your vehicle.

Remember, how to determine your car deductible is only part of the equation. If you’re going to get personalized coverage for less, you’ll need to compare your options. Give us a call to save money and time on car insurance in Colorado or fill out our online auto insurance quote form today!