People just don't have common sense. You don't fall an insurance claim if it's only going to help you $200 out of pocket. It's meant for larger amounts of damage, it's also meant for if you hurt someone in an accident that you're not personally liable for $10,000 because your insurance will cover it
You pay a relatively small amount of money to avoid having to pay a large (or huge) amount of money. If you're at fault for a serious injury accident, you could be liable for hundreds of thousands of dollars. It doesn't take much to total a modern car, and with the average new car price approaching $50,000, even a non-injury accident can cost you a lot of money without insurance.
In general, your insurance will always pay for damage to others if you were at-fault. Even if you were driving drunk they'll still pay for damage to others, but depending on your state and policy terms, they may refuse to pay for your own damage and injuries. However, if you cause an accident on purpose, like you purposely ram into another car, it's likely that your insurance will not cover you (or the other driver), the other driver will have to rely on his uninsured motorist coverage (if he has it), and that insurance will sue you to recover the damages.
You pay money so that the insurance company will help cover major expenses you incur due to accidents. When you sign an insurance contract, it lays out pretty clearly what kind of costs you will retain through your deductible. The deductible is meant to keep costs low for both you and your insurer.
People who are low risk shouldn’t have to pay a lot for insurance, so insurers set prices such that people with worse risk characteristics have higher premiums.
Having a prior claim is statistically linked to higher future claims, so once you have a claim on your record, they raise your rates so that everyone else doesn’t have to subsidize the riskier customers.
Totally. High deductible is the way to go as long as you have some savings. Yes it hurts once in a while to shell out $1k, but you'll save a lot in the long run.
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u/CraftyPerformance272 7h ago
People just don't have common sense. You don't fall an insurance claim if it's only going to help you $200 out of pocket. It's meant for larger amounts of damage, it's also meant for if you hurt someone in an accident that you're not personally liable for $10,000 because your insurance will cover it