When shopping for car insurance or filling a claim, you’ve likely heard the term deductible. Still, you may have questions regarding what it is and how it works. In short, a car insurance deductible is an out-of-pocket payment you must put toward a claim before your insurer steps in. Additionally, the amount you choose for your deductible can directly impact your insurance premium, so it’s important to understand a few basics. Let’s dive deeper into car insurance deductibles and how they work. 

What is a Car Insurance Deductible?

As stated, a car insurance deductible is an out-of-pocket amount you must pay toward an insurance claim before your insurer covers the rest—up to your policy’s limits.

Unlike a health insurance deductible, which is on an annual basis, you must pay a car insurance deductible every time you file a claim when applicable. For example, both comprehensive and collision insurance coverage typically involve a deductible.

Once you pay the deductible amount stated on your insurance policy, your insurer will cover the rest (up to your policy’s limits). Because you’re responsible for your deductible each time you file a claim, it’s vital to select an amount you’ll be comfortable paying in the event of an accident. 

How Do Car Insurance Deductibles Work?

A car insurance deductible allows insurance providers to share the cost of claims with their policyholders. For example, let’s say you have collision coverage with a $500 deductible and get in a car accident that results in $2,000 worth of damage to your vehicle. To file a claim and repair your car, you will pay $500 out-of-pocket before your insurer covers the remaining $1,500.

Do All Car Insurance Coverages Have a Deductible? 

So, what types of auto coverages use a deductible? Typically, the following coverages are subject to a deductible:

1. Comprehensive coverage – Comprehensive coverage covers your vehicle from damages outside your control, such as fire, falling objects, vandalism, or theft. Comprehensive coverage will almost certainly come with a deductible.
2. Collision coverage – Collision coverage will protect your vehicle if it is involved in an accident with another car or object, regardless of fault. Collision coverage is subject to a deductible.
3. Personal Injury Protection (PIP) – Personal injury protection covers medical costs and associated expenses for you and your passengers, regardless of fault. PIP is only mandatory in 12 states; of those, only Delaware, Florida, Hawaii, Kentucky, Massachusetts, New Jersey, New York, and Oregon offer a deductible.   
4. Uninsured/Underinsured Motorist Coverage – Uninsured/underinsured motorist coverage helps cover medical costs (bodily injury) or property damage after an accident with an uninsured or underinsured driver. Although a deductible isn’t required for bodily injury, some states may require one for uninsured motorist property damage claims.

Keep in mind that auto insurance deductibles work the same way regardless of the coverage type.

How Does a Deductible Affect My Insurance Rate?

You can usually choose your deductible amount for each coverage type. A $500 deductible is standard for most coverages, but they can range anywhere from $100 to $2,000. No matter the amount you select, there are a few factors to consider before making your decision.

First, you want to select a dollar amount you’ll be comfortable paying out-of-pocket in the event of an accident. Because you are responsible for your own deductible, choosing a high amount is unwise if you’ll have difficulty paying.

Second, consider how the deductible amount you choose will affect your car insurance premium. Because a deductible is a way to share risk with policyholders, a higher deductible typically results in a lower coverage rate. Conversely, a lower deductible typically results in a higher premium.  Think of it as a trade-off:

• High deductible = higher out-of-pocket expenses but lower insurance rates.
• Low deductible = lower out-of-pocket expenses but higher insurance rates. 

Suppose you can afford to cover a high expense in the event of an accident. In that case, a high deductible may be worth considering to reduce your premium costs. However, if you have multiple claims on your driving history and commute through heavy traffic, your likelihood of filing another claim may be high, making a lower deductible more favorable.

Do I Have to Pay a Deductible If Someone Hits My Car? 

In most scenarios, you will not have to pay a deductible if an insured driver hits you and is responsible for the accident. In these situations, the other driver’s liability insurance should pay for your property damage. However, if you choose to go through your collision insurer while the fault is being determined, you will be required to pay your deductible in the short term. In this case, your insurer will later seek reimbursement from the other party’s insurance provider, including your deductible amount.

In some states, you may be required to pay a deductible for an uninsured/underinsured motorist property damage claim after being involved in an accident with an uninsured/underinsured driver.

What about a Hit-and-Run? 

A hit-and-run is when a driver purposefully leaves the scene of an accident without providing any information to the other drivers involved. In these situations, collision coverage will help repair damage to your vehicle.

If you are a victim of a hit-and-run and cannot identify the other driver involved, you will, unfortunately, be responsible for paying your deductible to file a collision claim, even if you weren’t at fault. If you do not carry collision coverage and live in a state where you can file a hit-and-run claim using uninsured motorist property damage coverage, a deductible may also apply.

After a hit-and-run, always relay any new information regarding the other driver involved to your insurer.

What If Someone Files a Liability Claim with My Insurance Provider? 

Liability insurance is not subject to a deductible, so you will not have out-of-pocket costs if your insurer pays for damages/injuries caused to another person. However, your rates may increase if you are found responsible for an accident.

Get Help Selecting a Deductible with an Insurance Specialist

Deductibles are an integral part of any auto insurance policy, so it’s important to select an amount that works best for you. If you are searching for a new auto insurance provider, our team of specialists can help. We work with a network of trusted insurance partners to make it easy for you to compare quotes and find the best combination of coverage and price. To learn more about the coverage types available to you, give us a call at (888) 772-4247, or start a quote online.

The information in this article is obtained from various sources and offered for educational purposes only. Furthermore, it should not replace the advice of a qualified professional. The definitions, terms, and coverage in a given policy may be different than those suggested here. No warranty or appropriateness for a specific purpose is expressed or implied.

Car tires are one of the most important components of your vehicle. Not only do they affect your car’s overall performance, but they also play an integral role in keeping you safe and comfortable on the road. However, despite their durability, car tires don’t last forever. Over time, it’s normal for tires to wear down until they’re no longer safe to use. But how do you know it’s time to purchase new car tires? In this blog, we’ll cover the basics you should know about car tires and when to replace them.

When Should You Replace Car Tires?

According to the National Highway Traffic Safety Administration (NHTSA), you should replace your car tires every 6 to 10 years or 50,000 to 60,000 miles. Although this is the general consensus within the industry, there is no true magic number. Instead, you can rely on a few visual cues that can help you determine if your tires are still safe to use.

Tire Tread Depth

Car tires have grooves (also known as tire tread) which help with traction and bringing your vehicle to a safe stop. On average, new tires have tread depths of around 10/32nds of an inch. As you drive, it’s normal for the tread to wear down over time. But at what tread depth should you replace car tires?

The U.S. Department of Transportation considers tires with tread at 2/32nds of an inch unsafe. Although tires can still function properly at this tread depth, your ability to control your vehicle can significantly decrease, especially in rain or snow. While 2/32nds of an inch is the recommended minimum tread level, you should replace your car tires before they reach such a low level.

Here are three ways you can determine a tire’s tread depth:

1. Tire tread gauge – A tire tread gauge is an inexpensive tool that provides you an accurate reading of a tire’s tread.
2. Tread wear indicators – Tread wear indicators are raised bumps or bars located between a tire’s treads. These indicators are placed at 2/32nds of an inch, so if they are flush with the tread level, you should replace the tire as soon as possible.
3. The penny test – If you lack visual aids or tools to measure tire tread, you can always rely on the quick penny test. To perform the test, grab a single penny, turn it upside down so Lincoln’s head faces down, and place it between your tire’s tread. If you can clearly see his entire head, it’s time to purchase new car tires.

Tire Age

Even with perfect tread, tires can begin to lose durability and degrade as time passes, increasing their likelihood of failure. Weather conditions, storage time, and remaining stationary can all influence a tire’s lifespan, even if you rarely use the vehicle. 

Most tire manufacturers recommend replacing tires after 6 years and to never operate a vehicle with tires more than 10 years old. And yes, this includes your car’s spare tire. If your car’s spare is over 10 years old, consider replacing it, even if it looks brand new, to ensure its functionality.

How to Determine a Car Tire’s Age

Thankfully, all tires sold within the United States have a Department of Transportation (DOT) serial number, which identifies the tire’s production date, size, and load rating.

To learn a tire’s age, locate the final four digits of the DOT serial number. The first two numbers represent the week of the year, while the last two numbers represent the year.

So, if a tire’s DOT code ends in 4020, the tire was manufactured in the 40th week of 2020.

What Size Tires Should I Buy?

When in the market for car tires, you’ll quickly notice that your options are endless. But how do you know what size tire to buy? You can refer to your owner’s manual or the tire information sticker on the vehicle’s driver-side door panel to learn more about your car’s tire requirements. Here, you’ll find the vehicle’s original tire specifications, including tire pressure limits. No matter what type of tires you buy, you must ensure they match the original specifications to maintain optimal performance and safety.

Do I Have to Replace All Four Tires at Once?

Ideally, you should always replace all four of your tires at the same time. However, if you run over a nail and blow a hole in a tire, you only need to replace that single tire, right? Well, the answer may depend on the type of car you drive and the condition of the other tires. 

Two-Wheel Drive Cars  

If you own a two-wheel drive car, it may be possible only to replace one bad tire if the other three still have tread levels of around 8/32nds of an inch. In general, tread levels should never have a difference greater than 4/32nds of an inch, as this can cause traction issues. Still, experts agree that you should at least change tires in pairs if changing all four is not possible. When replacing two tires only, the new set of tires should go on the rear.

All-Wheel Drive Cars

Most manufacturers recommend replacing all four tires at once on all-wheel drive cars. That’s because the difference in tread could cause the wheels to spin at different speeds, which will ultimately cause damage to the vehicle’s drive drain.  

Does Auto Insurance Cover Tire Replacement?

Most auto insurance policies will not cover tire damage from normal wear and tear (usually defined as scratches, dents, punctures, cracks, or cosmetic blemishes). However, if you carry collision and comprehensive coverage, you’ll have protection if your tires are damaged due to an accident, theft, or vandalism. In addition, having roadside assistance can provide mechanical aid if you experience tire issues on the highway. 

Auto insurance can vary greatly from policy to policy, so it’s always best to speak with an insurance specialist that can answer any questions you may have. To learn more about the coverage available to you, contact our specialists by calling (888) 772-4247 or start your quote online.

The information in this article is obtained from various sources and is offered for educational purposes. Furthermore, it should not replace manuals or instructions provided by the manufacturer or the advice of a qualified professional. No warranty or appropriateness for a specific purpose is expressed or implied.

No matter how safe you strive to make your workplace, accidents happen. Injuries, illnesses, and even fatalities can occur on the job, leaving your employees and business vulnerable to financial and legal repercussions. That is why workers’ compensation insurance is a vital tool that can provide protection for both workers and you. We’ll explore the basics of workers’ compensation and why it’s so important for business owners to have.

Employer Benefits Under Workers’ Comp

Workers’ compensation insurance helps protect employers from potential lawsuits and avoids the actual cost of an employee’s medical expenses and lost wages following a workplace injury or illness. Without workers’ comp, employees or their families could sue in civil court for workplace injury or death. This situation could be financially devasting for your business and could even open you up to criminal investigation. In addition to helping your employee recover and return to work faster, it can potentially help you save on the costs associated with reduced productivity and the hiring of temporary workers.

Employee Benefits Under Workers’ Comp

While many workers are familiar with the general concept of workers’ compensation, the vast majority are unaware that there are numerous types of workers’ compensation benefits beyond payment for injuries or illness. Employees can be eligible for multiple types of benefits for injuries sustained on the job, such as:

Medical Expenses: Workers’ compensation will typically cover all reasonable and necessary medical costs related to a work-related injury or illness. This can include the cost of hospitalization, surgery, medicine, and physical therapy.

Lost Wages: Employees who are unable to return to work due to a work-related injury or illness are eligible for temporary or permanent disability benefits. This helps cover a portion of an employee’s lost wages however, the amount varies from state to state.

Death Benefits: Workers’ compensation may provide death benefits to the employee’s family if an employee dies due to a work-related injury or illness. These benefits can help cover funeral and burial expenses.

Rehabilitation Costs: If an employee requires rehabilitation due to a work-related injury or illness, workers’ compensation can help cover the cost of physical therapy, occupational therapy, speech therapy, and even vocational rehab or retraining.

Disfigurement Benefits: Workers who sustain permanent disfigurement because of their injuries are eligible for additional compensation in certain states. Typically, these benefits are calculated as a lump sum and determined by the severity of the disfigurement.

What Is Not Covered By Workers’ Compensation?

While workers comp insurance can provide important coverage for employers and employees, it does not cover every possible workplace incident or injury. Here are a few examples of what may not be covered:

• Injuries that occur outside of work or on any employee’s commute
• Pre-existing conditions
• Intentional self-inflicted injuries
• Injuries resulting from a physical altercation that the employee instigated
• Injuries sustained by an employee’s violation of safety guidelines or horseplay
• Alcohol and drug-related injuries
• Terminated employees

How Much Does Workers’ Compensation Insurance Cost?

Workers’ compensation insurance costs vary widely from state to state and industry. Rates are typically calculated as a percentage of your payroll, which varies depending on your industry and risk level.  It generally ranges from around $2 per $100 of payroll to over $70 per $100. In addition, the cost of workers comp insurance can also be affected by your company’s claim history, safety record, and any unique risk factors associated with your business.

Am I Required to Have Workers’ Comp for My Business?

Whether or not you need workers’ compensation for your business depends on state laws. However, most states require that businesses with at least one employee purchase worker’s compensation insurance. Failing to buy workers’ comp insurance can result in prison time and/or hefty fines. You’ll want to check with your state laws so you can find the rules that apply to you. Furthermore, you will need to purchase workers’ comp insurance from either an insurance company, insurance agency, or state fund. At AIS Insurance, our commercial insurance specialists know the ins and outs of workers’ compensation insurance and can match you with one of our A-rated insurance companies such as Texas Mutual, Hartford, and Liberty Mutual.

AIS Can Help Protect You And Your Employees

Workers’ compensation insurance is a smart investment that protects you as a business owner, as well as your business’s most important asset: its employees. We understand what it takes to build something special and we’re committed to helping you protect it. Speak with one of our Commercial Insurance Specialists today at (855) 919-4247 for a quick and easy free quote.

The information in this article is obtained from various sources and offered for educational purposes only. Furthermore, it should not replace the advice of a qualified professional. The definitions, terms, and coverage in a given policy may differ from those suggested here. No warranty or appropriateness for a specific purpose is expressed or implied.