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What You Need to Know About Vanishing Deductibles

Watch Out for Vanishing Deductibles

Many insurance agencies are enticing customers by offering vanishing deductibles on car insurance policies. Meant to encourage safe driving, the plans trim their collision deductible for each year they don’t file a claim. For example, if a customer’s deductible starts off at $500 and five years pass without a claim being filed, the deductible vanishes completely and the customer doesn’t have to pay anything when he finally files a claim.

This seems like a sweet deal but you’ll have to crunch the numbers to make sure the offer makes sense. Insurers often tack on nominal amounts to premiums that may end up eating into your actual savings, especially if you become so obsessed with making your deductible vanish that you refuse to file claims to cover major expenses.

There are consequences if you’re in a crash or get a moving violation while under the plans. Some insurance companies will say that you have to start anew, your original deductible is reinstated and you have to establish a clean record again to qualify for reductions. And it doesn’t make any difference who caused the accident.

Our agents offer this simple piece of advice for anyone looking to buy car insurance: Don’t make a decision based on an insurer’s commercials, no matter how appealing they seem. Instead, understand your personal needs and have an expert shop around for car insurance that best fits you.