Your home state might set laws that force you to purchase car insurance, but they can’t dictate which type of deductible you should choose. A deductible is the amount of money you have to pay out of pocket in case your car is damaged in an accident. High deductibles require you to pay hundreds or thousands of dollars out of pocket before the insurance pays the rest. Low deductibles or no deductibles don’t require as much upfront cash on your part, but the monthly premiums are higher.
First, find out the minimum or maximum deductible you can choose if you are currently leasing or financing your vehicle. Some companies or banks stipulate certain deductible amounts based on your vehicle make and model.
Next, examine your driving history. If you have a record of multiple accidents, it makes sense to keep a low deductible. Since car accidents can happen to the best of drivers, a low deductible is a lower risk overall. A clean driving record is no guarantee that another driver on the road won’t injure you or your vehicle.
If you aren’t concerned about coming up with car repair money (or car replacement money), then go ahead and choose the higher deductible to get that lower premium.