5. What Is My Deductible, and Can I Actually Afford It?
Your deductible is the amount you pay out of pocket before your insurance coverage kicks in, and choosing this number without thinking it through is one of the most common mistakes new policyholders make. Ask your agent to show you how different deductible amounts affect your premium, and be honest with yourself about whether you could comfortably pay that amount in cash if you needed to file a claim tomorrow. It can also help to ask how the deductible applies if multiple coverages are triggered by a single accident, since some policies apply separate deductibles to collision and comprehensive claims rather than a single combined amount.
A lower deductible costs more every month but protects you from a larger unexpected expense, while a higher deductible saves money monthly but requires more available cash on hand during a claim.
A helpful exercise is imagining the worst realistic accident you could have tomorrow and asking yourself honestly whether you could write a check for your chosen deductible amount without financial strain, since that gut check often reveals whether your deductible is set appropriately for your actual finances.