Insurance360 | Is Auto Insurance Deductible?

What Exactly Is a Deductible?

In essence, a deductible is the portion of your car repair expenses that you have to cover out-of-pocket before your insurance policy kicks in and your insurer covers the rest. Before moving forward, keep in mind that the kind of deductible you get with your auto insurance is somewhat different from what you get with other types of insurance. For instance, your deductible isn’t paid annually with auto insurance. Usually, you have to pay a deductible only after you must’ve filed a claim for a payout. By inference, you only pay a deductible after your vehicle must have suffered an accident or damage of some sort. So, if, for example, your deductible is 1, 000 Ringgit and your vehicle has suffered damage worth 10 000 Ringgit, you would have to personally put down 1 000 Ringgit before your insurer covers the remaining 9, 000 Ringgit.

This means that if your car suffered damage worth only 800 Ringgit, you would have to cover all the expenses out-of-pocket because it falls under your deductible. Of course, this is restricted to only vehicle owners with a Third Party, Fire, and Theft or a Comprehensive policy. As a vehicle owner, you can choose to have either a high or low deductible when taking out your policy. With a higher deductible, your car insurance rate is automatically lower. However, what you will have to pay out-of-pocket will be much higher. Inversely, with a lower deductible, your auto insurance rate is higher and comes with a lower out-of-pocket cost. When choosing your deductible, it is always helpful to factor in your vehicle’s overall cost and the likelihood of your filing a claim.

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