clock September 3, 2013 comments No Comments flowchart Automobile InsuranceOur Blog tag Saving Money

A vanishing
deductible discount is not a magic trick (however, if you wish to embrace your
inner child, it just might be…). It can be a way for you to save money on your
car insurance premium—if you qualify. Essentially, the vanishing deductible is
an incentive that rewards “safe” drivers by reducing the amount of their
deductible, or out-of-pocket expenses if they do file a claim.

Insurance
companies know that safe drivers have fewer car accidents and get fewer
speeding tickets. Safety conscious car drivers tend to follow the rules of the
road. They make fewer insurance claims. This can save insurance companies a
significant amount of money every year. Insurance companies like to have safe
drivers as policyholders for just this reason.

 

Vanishing
Deductible Saves Safe Drivers Money on Deductible

Some big
insurers offer “safe” drivers a special incentive, called the vanishing
deductible discount. While each insurance company’s specific safe driver
program varies, the programs generally subtract some of the cost of the
deductible for each year a driver qualifies as a safe driver. Auto insurance
companies also tend to reward driver loyalty.

It is
important to realize that your insurance company does not take this safe driver
deductible discount off the cost of your car insurance premium. Rather, this
money is money saved out-of-pocket on the amount of your deductible if you have
a car accident and file a claim.

 

How Does The
Vanishing Deductible Work?

Let’s say
that you have an insurance premium that includes a $1000 deductible. This means
that in the event of a car accident in which there is $10,000 worth of damage
to your auto, you will have to pay the first $1000 out-of-pocket. Your
insurance provider will then cover the remaining cost of repair.

Typically, if
you are in a vanishing deductible discount program, each year that you do not
file a car accident claim, your insurer will drop your deductible by $100. If
you went for ten years without an accident, depending on the maximum vanishing
deductible credit your insurance company provides, you could, theoretically
wind up with a zero deductible.

 

What Makes
a Safe Driver?

Each
insurance provider has different criteria for qualifying as a safe driver. The
most important factors that insurers may consider include your driving history,
history of traffic violations, car accidents, and other factors. Even if you
have a less than stellar driver’s record, it may still pay to ask your
insurance agent if you qualify or how you can qualify in the future.

 

Do
You Qualify for the Vanishing Deductible Discount?

To learn
whether your insurance company offers the vanishing deductible discount, ask
your insurance agent whether your policy includes the vanishing deductible. And
while the vanishing deductible discount does not save you money unless you are
in an accident, there may be other ways to save on the cost of your insurance
premiums. Get in touch with an agent who will take the time you need to
understand your options. Call 401-723-8510.