It’s possible to cut your insurance costs substantially by raising your deductible. In exchange for a $500 reduction each year, you’ll pay less each year in premium. If you’ve never been in an accident, your deductible will be worth a few hundred dollars. But consider this: you may need coverage for an expensive car, and your deductible won’t cover the entire cost. It will, however, cover many doctor’s visits and car repairs.

Comprehensive insurance covers damages to your car despite no fault of your own. This type of coverage also covers damage to your car from road debris, animals, and vandalism. While most accidents are covered under comprehensive insurance, some companies exclude damage caused by flooding, vandalism, and civil disturbances. This coverage will lower your annual insurance payments and provide peace of mind, but you need to know how much you need. If you own a new car, you might not need comprehensive or collision coverage.

It’s important to compare the costs of collision coverage with your vehicle’s actual cash value. The deductible is a crucial part of the premium, but collision coverage is an extra cost that you should consider. However, if you’re planning to keep your car for at least 10 years, it may be better to forgo comprehensive coverage. Consider the current value of your car, the cost of collision coverage, and the deductible you’ll have to pay each year. If your car is a teenager’s first car, the deductible is relatively low. However, if you’re in an older car with higher value, you may want to consider collision coverage.