What a deductible is
A deductible is the amount you pay toward a covered claim before your insurance pays the rest. If you have a $500 deductible and a covered repair costs $3,000, you pay $500 and your insurer pays $2,500.
If the damage costs less than your deductible, the insurer generally pays nothing, so a claim usually doesn't make sense.
Which coverages have a deductible
Auto insurance deductibles most commonly apply to coverage for your own car:
- Collision, for damage from a crash.
- Comprehensive, for theft, weather, fire, vandalism and similar events.
Liability coverage, which pays for damage you cause to others, generally has no deductible. Depending on your state and policy, deductibles can also apply to some other coverages, such as personal injury protection or uninsured motorist property damage.
Collision and comprehensive can have different deductibles. For example, a policy might have a $1,000 collision deductible and a $500 comprehensive deductible.
How it affects your premium
Choosing a higher deductible usually lowers your premium, because you're agreeing to cover more of each claim yourself. A lower deductible means a higher premium but less to pay after a claim.
| Deductible | You pay | Insurer pays | Effect on premium |
|---|---|---|---|
| $250 | $250 | $2,750 | Highest |
| $500 | $500 | $2,500 | Lower |
| $1,000 | $1,000 | $2,000 | Lower still |
| $1,500 | $1,500 | $1,500 | Usually lowest |
How much you save by raising your deductible varies by insurer, vehicle and location. Get quotes at a few deductible levels to see the actual difference for you.
How deductibles work after a claim
- It usually applies per claim. Unlike many health plans, an auto deductible typically applies each time you file a claim, not once a year.
- It's usually subtracted from the payout. You often won't write a check to your insurer. Instead, the insurer pays the repair shop or you, minus the deductible.
- If someone else is at fault, their liability insurance should pay for your damage. If you use your own collision coverage first, your insurer may try to recover costs from the other driver's insurer, and you may get some or all of your deductible back if that succeeds.
- Glass damage may be handled differently. Some policies, and some states, offer reduced or zero deductibles for windshield repair or replacement.
How to choose your deductible
- Start with your savings. Choose an amount you could pay on short notice without hardship. A low premium doesn't help if you can't afford the deductible when you need your car fixed.
- Compare the savings with the risk. If raising your deductible by $500 saves only a little each year, it may take a long time without claims to come out ahead. If the savings are significant, a higher deductible may be worth it.
- Check your loan or lease. Lenders and leasing companies often set a maximum deductible.
- Think about small claims. With a higher deductible you'll pay for minor damage yourself, which some people prefer anyway to avoid claims that could affect their rate.
To see how your deductible fits with other factors, try our Car Insurance Calculator.
Frequently asked questions
Do I pay the deductible if the accident wasn't my fault?
If the other driver's liability insurance pays for your damage, you generally don't pay a deductible. If you use your own collision coverage, you'll usually pay it upfront, and your insurer may recover it from the at-fault driver's insurer later.
Can I change my deductible?
Usually yes. Many insurers let you change it at renewal or during the policy term. The change applies to future claims, and your premium will be adjusted.
Is a $1,000 deductible a good idea?
It can be if you could comfortably pay $1,000 after an accident and the premium savings are meaningful. If paying that amount would be difficult, a lower deductible may be the safer choice.
