The deductible is one of the most important factors you must consider when selecting your car insurance policy because it will have a direct effect on how much you will pay monthly for your car insurance premium. The deductible is the amount that you agree to pay out of your pocket before the insurance company will pay for your claim. In practical terms, the deductible prevents car insurance companies from paying out for smaller dollar amount claims.

Both the collision and comprehensive part of your policy has a separate deductible. Comprehension coverage covers damage to your car caused by anything other than another car; this could range from vandalism, to a hail storm or hitting an animal. This also includes theft of your vehicle.

Collision coverage sounds like what it is: coverage for collision caused to your vehicle from another car while on the road.

Typically, deductibles range from $250-$1,500. Generally you can expect that, the higher the deductible, the lower your premium will be. A deductible of $1,500 might save you anywhere from 10-20% on the premium price. However, it is important to remember to choose a deductible that you will be able to afford in the event of an accident. It would be disappointing to get into an accident and then not be able to have your car repaired because you cannot afford to pay your portion--the deductible. On the other hand, paying too much for unneeded coverage is a waste of your hard-earned money as well.

Many auto insurance carriers provide deductible calculators on its Web site that may prove useful when determining what you can afford and what best fits your needs. Others provide toll free numbers so that you can speak to a customer representative.