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Many people raise their car insurance deductibles to have more affordable car insurance premiums. By doubling your insurance deductibles, you can reduce the price of your premiums by up to 40%.

However, this is only a good idea if you have money saved to pay the deductible if you have an at-fault accident. If you can’t easily access this money, you may not be able to pay your share of the repair bills, and your car may not be fixed in a timely manner. Worse yet, you could be required to pay for a portion of someone else’s property damage and be unable to do so. Many people without large cash reserves must keep their deductibles low. However, to do this, they often have to pay higher premiums.

Is there a way to lower your deductible and still keep your premiums manageable?

There are several ways to achieve this goal. Each method requires some planning and discipline, but can be achieved by anyone looking for a low deductible and low premium.

First, you can choose to insure yourself with a company that offers a “disappearance deductible” program. Under these programs, your deductible decreases by a fixed amount each year that you are accident-free and claim-free. Some of these programs allow you to lower all of your deductibles, and some only allow you to lower your collision or liability deductible. Different companies offer different amounts for the deduction and at different rates. You can compare programs to find one that works well for you.

Another option is to create a plan where you gradually save your deductible amount while slowly increasing your deductible every six months. Here’s how this would work: Assume your current deductible is $250, the lowest your company allows. Now suppose you would save $100 per renewal period by raising your deductible to $500. If you do that and save the money you saved on your premiums, plus your initial $250, you’d have $450 in a year, almost enough to pay your new deductible. You can keep saving money so you can gradually increase your deductible to $750 and then $1,000. You can even choose to raise your deductible higher than this if your carrier allows you to do so. As your deductible slowly increases, your premiums will decrease, saving you the money you’ll need to pay the new, higher deductible.

You may also find a company that offers “accident forgiveness.” With accident forgiveness, you can be “forgiven” for your first accident with no deductible if the accident does not exceed a certain dollar amount in total cost. This is very useful to save your deductible fund if you have a minor accident. You can also save money and pay for damages yourself if the accident is very minor; This way, by not making a claim, you keep your premiums lower and you don’t have unexpected increases in the price of your auto insurance.

Other ways you can lower your deductible are to request a deductible reduction with your insurance company, which can be balanced against other discounts you may be eligible for. If you’re not currently taking advantage of all possible discounts, you may be cheating yourself out of savings that could pay for a lower deductible.

Be sure to consider any separate deductibles that apply to your policy as a whole. If you have full coverage, including liability, comprehensive and collision, you probably have separate deductibles for each policy. Also, you likely have a deductible for things like uninsured motorist coverage. Some states set by law the deductible for uninsured motorist coverage; you can’t raise that deductible even if you want to. However, most states allow you to pay with your comprehensive and collision policy deductibles, raising or lowering them as you see fit.

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