Finding the right car insurance policy can be quite a challenge, especially once you get into the nitty-gritty details. Canadian drivers have several car insurance options to choose from, along with a variety of unique and beneficial add-ons.
Car insurance add-ons are a type of optional coverage that drivers can include in their policies. Some add-ons are relatively straightforward, while others, like disappearing deductibles, require a little bit of background knowledge to completely understand.
That brings us to today's topic. Continue reading to learn what a disappearing deductible is, how the add-on works, where you can purchase this add-on and more.
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What is a car insurance deductible?
A car insurance deductible is the set amount that a policyholder pays to their auto insurance company before receiving coverage. Most drivers have a car insurance deductible ranging from $500 to $1,000.
Policyholders with a high deductible tend to pay less for coverage monthly or annually, but they have to pay more when they make an insurance claim.
In contrast, policyholders with a low deductible generally pay more for coverage monthly or annually, but they pay less when they make an insurance claim.
Here's a simple example of how deductibles work:
You are involved in a car accident (in which you're deemed "at-fault") which results in $7,500 worth of physical damage to your vehicle.
If you have a $1,000 deductible, you need to pay $1,000 before your car insurance company reimburses you. Your car insurance company will then cover the remaining $6,500 (or your coverage limits) worth of repair or replacement damage.
Chat with your Surex insurance advisor to learn more about what size of deductible is right for you.
What is a disappearing deductible?
Simply put, a disappearing deductible (also known as a vanishing or diminishing deductible) is an optional form of coverage that rewards drivers for being accident or claim-free during their policy periods.
Each time a driver completes their policy period without getting into a car accident or making an insurance claim, their insurance provider lowers their deductible by a set amount or percentage.
For instance, if you have a $500 deductible and have a disappearing deductible add-on that removes $100 from your deductible each period, you will have a $400 deductible by the end of your policy period.
Drivers that can maintain their accident and claim-free status for multiple policy periods can eventually have a deductible of $0. If you reach this point, you won't have to pay a deductible the next time you make a claim.
Please note that if you have a disappearing deductible and get into an accident after multiple policy periods, your deductible will return to the original amount. This is something drivers should keep in mind while deciding if they'd like to purchase this add-on.
Now you know the answer to the question, "what is disappearing deductible coverage and how does it work?".
What types of drivers benefit from having a disappearing deductible?
A disappearing deductible is an excellent add-on for various types of drivers. However, it's ideal for motorists that are either prone to getting into auto accidents or drivers that have a history of being accident and claim-fee.
Drivers with a history of being accident and claim-free
Drivers who have a track record of being accident and claim-free can benefit from having a disappearing deductible for one primary reason: obtaining a $0 deductible.
Even if you're an experienced driver that's never been in an accident, you never know what might happen on the road. So, why not take advantage of your good driving habits by working towards the $0 deductible?
Drivers who are prone to auto accidents
Drivers who get into collisions or make car insurance claims on a semi-regular basis (every few years, for instance) can highly benefit from purchasing a disappearing deductible add-on.
Although you may not make it to the $0 milestone, going one or two years can reduce your deductible by a reasonable amount, allowing you to save some money in the long run.
Who offers disappearing deductible coverage in Canada?
Drivers should note that not all car insurance providers in Canada offer the disappearing deductible add-on. One of the car insurance companies that does offer this add-on is Aviva.
Speak with your Surex insurance advisor to learn if you're eligible for Aviva's disappearing deductible add-on.
What are some other beneficial car insurance add-ons for drivers in Canada?
Disappearing deductibles are just the tip of the car insurance add-on iceberg; there are several optional forms of coverage that drivers can add to their policies, some of which include:
- Ride-sharing
- Accident rating waiver
- Coverage for transportation replacement
- Collision protection
- Conviction protector
Reach out to your Surex insurance advisor to learn more about these add-ons and to get accurate pricing details based on your current (or prospective) provider.
Do you have unanswered questions about disappearing deductibles?
As we mentioned earlier, car insurance can be a complicated subject.
If you have questions, comments or concerns about your current car insurance policy or would simply like to shop around for a new carrier, don't hesitate to contact your Surex insurance advisor today.
