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High Deductibles: Pros and Cons

A stethoscope placed on several bill stacks to portray the pros and cons of high deductibles.

You’re on a very tight budget. The idea of a monthly insurance payment seems more like a luxury than a necessity. So you start comparing rates. You want the cheapest rate possible, something that will keep you covered but won’t empty your bank account either.

The insurance plans you find on this search have mostly high deductibles, some of them very high. You wonder, ‘Is a high deductible a safe bet for your insurance needs?’ The answer is: it can be. To illuminate the benefits and challenges of high deductibles, we’ve crafted a series of pros and cons. Read on to learn more about high deductibles and whether they’re right for you.

Pros of High Deductibles

High deductibles, particularly in health insurance plans, are a good fit for individuals and families who are relatively healthy. Also known as consumer-directed plans, they help people save money as long as they don’t get sick very often. Young people without preexisting health conditions, for example, benefit from cost-effective health insurance plans with high deductibles.

Just because these plans are cheaper, it doesn’t mean they completely skimp on coverage. Plans with high deductibles still provide enough coverage to make sure you can see doctors, get medicine, seek mental health treatment, and visit a specialist (if needed).

Cons of High Deductibles

The single biggest challenge you’ll face with a high deductible is paying expenses out of pocket. It can represent a huge, ongoing financial drain, underscored by the fact that you’ll still be paying a monthly premium. This rings especially true with auto insurance plans. Most insurance companies consider plans with high deductibles to be a form of high risk auto insurance; namely, you assume most of the financial risk should you get into a collision.

For example, let’s say your auto insurance deductible is $15,000. On a rainy day, you lose control of your vehicle, hit a tree, total your car, and break your arm. You take an ambulance to the emergency room and get your car towed.

The ER doctor confirms your fracture, puts your arm in a sling, writes you a prescription for pain management, and tells you to schedule an appointment with an orthopedic specialist. All of that medical treatment – and your car repair – might not reach the limit of your high deductible, meaning you’ll be paying out-of-pocket expenses until it does. This financial burden could be staggering for some people, especially if you’re put out of work as a result of your accident.

Browse Our Health and Auto Insurance Plans

Freeway Insurance offers a wide variety of plans with high deductibles for budget-focused people. We encourage you to browse our selection of auto insurance plans and health insurance plans. Before you decide on a specific plan, review our list of the pros and cons of high deductibles.

Please feel free to reach out to a Freeway Insurance customer service representative with any questions you may have at (888) 443-4662. To get a quote for high risk car insurance, call us today at (800) 777-5620.

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