How can the deductible affect the cost of auto insurance?

A higher deductible usually lowers the premium because when policyholders choose a higher deductible, they are agreeing to pay more out-of-pocket in the event of a claim. This reduces the risk for the insurance company since the insurer will only pay the costs that exceed the deductible amount. As a result, insurers often reward this lower risk by charging a lower premium. This creates a balance where customers can save money on their premiums while also taking on more risk themselves. Understanding how deductibles affect premiums can help consumers make informed choices about their auto insurance coverage and their financial preparation for potential claims.