What deductible amount should I choose?

Beware those people who suggest a one-size-fits-all approach to insurance deductibles. Since each one of us has differences in the number of vehicles we drive, the number and age of our drivers and the size of our paycheck, we need to choose a deductible that fits our particular needs. Here are some guidelines that will help you determine how to decide:

• Choose the largest deductible that you can afford to pay in case of an at-fault accident.
• Do not submit small claims to your insurance company.
• Have an emergency fund or savings account from which to draw funds to pay for an unexpected accident.

If you do not have sufficient emergency funds available to pay for a large deductible, you may be wiser to carry a low deductible. DINKs (double income no kids) or established couples with more than one car may be in the best position to carry a high deductible. Singles with good-paying jobs may also fit into this category. If you do not have savings, only have a single car and have no budget flexibility, don't feel compelled to carry a high deductible. If you have an accident you need to be able to get your car repaired as soon as possible so that you do not miss work and jeopardize your ability to earn income.

Every claim you make to your insurance company may cost you money in the long run. Claims will increase your insurance rates over time and may even jeopardize your ability to carry low-cost insurance. Some carriers may drop customers with a high claim history. You can avoid this problem by only submitting a claim if you absolutely must. If you have car repairs for $1,100 due to a covered accident and have a deductible for $1000, consider paying the whole bill yourself without submitting it to your insurance carrier. Always remember, however, to follow your state and local laws about reporting accidents to authorities!