A deductible is the amount of the loss which you, the insured, is responsible to pay before benefits from the insurance company are payable. So if you are in an accident and need to use your full coverage (comprehensive or collision coverages) a deductible will need to be paid before the insurance company pays their portion of the claim.

You choose the deductible amount at the inception of your policy. Typically the lower the deductible the higher your premium rate is for that coverage. Thus many people choose a higher deductible amount to lower their premium. But it is advised not to make the deductible higher than what you could afford to pay if need be.

So if you choose a $750 deductible your premiums with Farmers should be lower than if you choose a $500 deductible with them. If you feel that $750 is too high of a deductible than you can choose a lower amount, say $500, but will pay more for the policy premium.

Shopping around for insurance, especially your first policy is a good idea. And when doing so, try getting quoted for different deductible amounts to see the difference in the pricing of the premium. You can get car insurance comparison quotes by clicking here.

Articles such as Tips for First Time Insurance Buyers in our learning center may also be of help. We invite you to compare car insurance.