Car Insurance Deductibles Explained
A deductible is the amount you pay out of pocket before insurance pays anything on a covered claim. Collision and comprehensive each have their own deductible, typically $250 to $2,000. Raising your deductible lowers your premium; lowering it raises your premium. Pick a deductible you could pay tomorrow without disruption, not one that gets you the lowest quote but would strand you at claim time.
How the deductible works
If your car has $3,000 in covered damage and you carry a $500 deductible, the insurer pays $2,500 and you pay $500.
If your car has $3,000 in covered damage and you carry a $500 deductible, the insurer pays $2,500 and you pay $500. If the covered damage is $400 with a $500 deductible, the claim is under your deductible, you pay all of it and it isn't worth filing. Deductibles are per-claim, not per year.
Collision vs comprehensive deductibles
- Collision deductible applies to crash damage claims.
- Comprehensive deductible applies to theft, fire, weather and vandalism claims.
- They're set separately, many drivers pick a lower comprehensive deductible in hail-prone areas.
- Some insurers offer a $0 glass deductible add-on for windshield claims.
How much does raising the deductible save?
As a rough guide, moving a collision deductible from $500 to $1,000 typically saves 10–20% on that coverage; going from $1,000 to $2,000 saves less in percentage terms.
As a rough guide, moving a collision deductible from $500 to $1,000 typically saves 10–20% on that coverage; going from $1,000 to $2,000 saves less in percentage terms. Savings vary by state, carrier and vehicle. Comprehensive deductibles behave similarly.
Picking a deductible that fits your life
The right deductible is the largest amount you could pay from your emergency fund without disruption, matched against the premium savings.
The right deductible is the largest amount you could pay from your emergency fund without disruption, matched against the premium savings. If a $1,000 deductible saves $200/year over $500, you break even after 2.5 claim-free years, favorable if you're a low-frequency claimant. If you have very little in savings, a lower deductible protects cashflow at the cost of a higher premium.
Frequently Asked Questions
Does the deductible apply to liability claims?
No. Liability pays other people, you don't pay a deductible. Deductibles apply only to your first-party coverages (collision and comprehensive).
Can I change my deductible mid-policy?
Yes. Contact your insurer; a new deductible typically applies going forward on new claims, not retroactively.
What happens if my repair is less than the deductible?
You pay the whole cost yourself. Small repairs usually aren't worth filing because they can also affect your renewal rate.
Is there a way to reduce a deductible?
Some insurers offer a 'disappearing deductible' or accident-forgiveness perk that reduces your deductible over consecutive claim-free years.
Related Guides
- Comprehensive vs. Collision Insurance
- What Affects Your Car Insurance Premium
- Auto Insurance Coverage Types Explained
Sources: NAIC, auto insurance basics · Insurance Information Institute.