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What is a Car Insurance Deductible?

Last Updated on April 6, 2024 by a2z_admin


A car insurance deductible is the money you have to pay when you make a claim for things like damage to your car from accidents, bad weather, or if you get hurt in a car accident. The deductible applies to different parts of your insurance, like comprehensive, collision, personal injury protection, or uninsured/underinsured motorist property damage coverage.

If your car gets hit by hail, and you need your insurance to cover the repairs. You tell your insurance company about the damage, and they agree to pay for it. But before they give you the money for the repairs, they take out the deductible amount. Usually, this is a fixed amount, like $500 or $1,000.

Here are a few key points explained more simply:

  • Different parts of your insurance, like comprehensive or collision, have deductibles.
  • You get to choose how much your deductible is.
  • Some states have rules about the minimum deductible for personal injury protection.
  • If you choose a higher deductible, your insurance cost might be lower.
  • You have to pay the deductible each time you make a claim.
  • The insurance company subtracts the deductible from the money they give you; you don’t directly pay it to them.

What are the different deductibles for car insurance?

Your car insurance is like a bundle of different coverages. Some coverages, like liability, help pay for injuries and damages if you cause an accident. There are other coverages, such as comprehensive, collision, personal injury protection, and uninsured motorist property damage, that are there to assist with injuries in your car and damage to your vehicle. These coverages may come with deductibles, which is like the amount you agree to pay when you make a claim.

Here are a few types of coverage that usually involve a deductible or give you the choice to include one:

Comprehensive Coverage:

  • Comprehensive coverage protects your car from damage caused by incidents other than collisions. This includes things like theft, fire, floods, vandalism, and more. The deductible for comprehensive coverage is what you agree to pay when you need to fix or replace your car after making a claim. If the repair costs are less than your deductible, you pay for the fixes.
    • Special Note: In some cases, you might not have to pay your comprehensive deductible. For example, if you have a “full glass” option, it covers windshield and glass damage without a deductible. Some states also don’t allow deductibles for glass replacement. There’s also the option of zero-deductible comprehensive coverage, where you don’t pay anything for comprehensive damage claims, but your overall premium is higher.

Collision Coverage:

  • Collision coverage takes care of damage to your car resulting from a collision where you’re at fault. It doesn’t cover regular wear and tear or mechanical failures. The deductible for collision coverage applies when you file a claim for damage to your vehicle.
    • Keep in Mind: Collision deductibles usually range from $0 to $2,500 or even higher. While adding collision coverage increases your premium, you can influence it by adjusting your deductible. A higher deductible generally means a lower premium. Since collision claims are often more expensive, the deductible can have a significant impact on your premium.

Uninsured and Underinsured Motorist Property Damage:

  • This coverage helps when your car is damaged by a driver who doesn’t have insurance or enough insurance. It might also apply in hit-and-run situations. While this coverage is optional in many states, some require it. You might get to choose a deductible if your state offers this option.

Personal Injury Protection (PIP):

  • PIP coverage may be mandatory or optional, depending on your state. It helps pay for medical expenses for you and your passengers after an accident. It could also cover things like lost wages. If you file a claim under PIP, there might be a deductible. Your state might offer different deductible options, and the one you pick can affect your premium.

How Car Insurance Deductibles Work

If your car gets hit by hail, and it’s going to cost $5,000 to fix it up at the repair shop.

Now, if you have a $500 deductible for your car insurance, here’s what happens: the insurance company will take away $500 from the $5,000 needed for the repairs. That leaves you with $4,500 from the insurance to cover the fix-up, and you’ll have to handle the remaining $500 on your own.

You get to pick this deductible amount when you first get your insurance policy. And every time you have to make a claim, you’ll need to cover that deductible. Just so you know, if you decide to change your deductible later on, it won’t affect any ongoing claims.

Most people go for a $500 deductible, but it can range from $100 to $1,000 or even more. The amount you save on your insurance by choosing a higher deductible depends on the insurance company and where you live.

When do you pay the deductible for car insurance?

When it comes to car insurance, understanding when you have to pay your deductible is important. In most situations, you’re responsible for the deductible, except in certain circumstances.

If you’re in an accident where another driver is at fault, you won’t need to pay the deductible. Similarly, if your claim falls under liability insurance, covering injuries and property damage when you’re at fault, you won’t have to pay a deductible, as long as the costs are within your coverage limit.

There’s also something called a diminishing deductible. This type of deductible rewards safe drivers by reducing their deductible each year they go without an accident. In some cases, it might even disappear altogether.

When you’re picking a deductible, think about whether you’re okay with higher out-of-pocket costs or prefer lower monthly payments. Choosing a higher deductible can lower your overall insurance rate, but it means you’ll have to pay more out of your own pocket if you ever need to file a claim.

How do the deductibles in car insurance affect how much you pay?

Our research at AtoZinsurances, where we looked at how much people pay for car insurance and the deductibles they choose all across the country, confirmed something our team of insurance experts already knew. Generally, if you choose a higher deductible for your car insurance, your monthly payments (or premiums) can be a bit lower. Here’s the deal: when you go for higher deductibles, it means you’re okay with paying more money yourself if something happens to your car, like an accident. Because you’re taking on more of the cost, the insurance company might charge you less each month.

But here’s the thing—it doesn’t always make a huge difference, and we found this especially true for folks who have a clean driving record. If you’ve been a safe driver and don’t have any accidents or tickets on your record, the savings from choosing a higher deductible might not be that big. Our study didn’t look at situations where someone had an accident or got a ticket, though. In those cases, picking a higher deductible could actually save you more money.

So, let’s break it down:

  • Higher deductibles: If you decide to go with higher deductibles, your monthly car insurance bill might be a bit lower. But before you make that choice, think about whether you can actually afford to pay those higher amounts if something happens to your car. If it feels like too much money, it might be better to stick with lower deductibles and pay a bit more each month.
  • Lower deductibles: On the flip side, lower deductibles mean you won’t have to take as much money out of your own pocket if you’re in a car crash or something bad happens to your car. That’s good news, right? Well, here’s the catch: if you have lower deductibles, you might be tempted to make more claims for smaller things. And making too many claims can actually make your monthly payments go up over time, especially if you’re at fault in those incidents.

So, it’s all about finding the right balance that works for you and your wallet.

Average Car Insurance Costs Based on Deductible Amounts

We’re breaking down the average cost of car insurance at different deductible levels. The base rates we’re using have a $500 deductible for both comprehensive and collision coverage. This is why you don’t see any change in the yearly cost at that level.

Here’s the scoop:

  • $100 comprehensive and $500 collision deductible: $2,301 per year (+$287 impact)
  • $250 comprehensive and $500 collision deductible: $2,150 per year (+$136 impact)
  • $500 comprehensive and $500 collision deductible: $2,014 per year (no change)
  • $500 comprehensive and $1,000 collision deductible: $1,951 per year (-$63 impact)
  • $1,000 comprehensive and $1,000 collision deductible: $1,786 per year (-$228 impact)

Wondering what “premium impact” means? It’s just how much your yearly cost changes when you adjust your deductibles from the $500 level.

If you make small changes, like going from a $250 comprehensive deductible to $500, your premium doesn’t change much. But if you make bigger changes, like going from a $100 comprehensive deductible and $500 collision deductible to $1,000 for both, you could save over $500 per year, on average. 


When you’re in a situation where you’re found at fault for hitting another car, different parts of your insurance policy can come into play. The bodily injury liability and property damage liability cover the damages and injuries to the other person and their vehicle. The good news is that these coverages don’t have any deductible. However, if you also have collision coverage and want your insurance to help with fixing your own car, you’ll need to pay a collision deductible.

When thinking about your collision deductible, it’s essential to figure out how much you could realistically pay if there’s an accident. If you have enough money saved up and can easily cover $1,000, $2,000, or more in case of an accident, you might want to go for a higher deductible. This could help in reducing the overall cost of your insurance. On the other hand, if you’re worried about paying a lot out of your own pocket after an accident, a lower deductible might be a better choice.

Most insurance experts suggest picking a deductible that you can comfortably afford. If you’re looking to lower your monthly payments, you might consider a higher deductible – but only if you can manage it. However, if paying $1,000 upfront is too much for you, it might be smarter to go for a lower deductible and accept a slightly higher premium. Also, think about the value of your car. For instance, if your car is worth only $1,500, having a $1,000 deductible means your insurance will only cover up to $500 in damages.

If you make a claim covered by insurance that has a deductible, you might have to pay that amount before any work begins on fixing your car or before you can take your car back after repairs. Most insurance companies will ask you to pay the deductible directly to the repair shop, while they cover the rest, minus your deductible. That’s why experts usually recommend choosing a deductible that you can comfortably handle in case you need to make a claim.

About the Author

Alex Huber is a content writer for Atoz Insurances and he is a very experienced and well-rounded freelance content writer who specializes in the insurance and finance niches. His writing is engaging and informative, and he has a strong understanding of the industries he writes about.

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