Car Insurance Deductibles Explained: How to Choose One
A deductible is the amount you pay yourself on a covered claim before your insurer pays the rest. It is one of the choices that affects what you pay for a policy. This guide explains the basics in plain words. Details vary by insurer and by state.
What a deductible is
If you have a covered loss and a deductible of a set amount, you pay that amount toward the repair and the insurer pays the remainder, up to your coverage limits. If the damage costs less than the deductible, you generally pay it all.
Which coverages have a deductible
- Collision: damage to your car from a crash, whoever is at fault
- Comprehensive: non-crash damage such as theft, fire, hail or hitting an animal
- Liability coverage usually does not have a deductible, since it pays for harm you cause to others
Higher or lower deductible
In general, a higher deductible lowers the premium and a lower deductible raises it. The trade-off is how much you would have to pay at the time of a claim.
Things to think about
- Could you pay the deductible from savings on short notice?
- How much does the premium change between options? Ask for quotes at several levels
- How old and valuable is the car?
- Does your lender or lease require certain coverages and a maximum deductible?
Some policies have more than one deductible
Collision and comprehensive can have different deductibles, and some policies set a separate one for certain events. Ask your agent to list every deductible on the quote.
Questions to ask your agent
- What are my deductibles for collision and comprehensive?
- How much would my premium change at a higher or lower deductible?
- Is there a separate deductible for glass or weather?
- How does a deductible apply if another driver is at fault?
Next step
A licensed agent can quote the same coverage at different deductibles so you can compare. HavenLine is a referral service, not an insurance company.
Questions
Is a higher deductible always better?
Not necessarily. It can lower your premium, but you must be able to pay it when you have a claim.
Do I pay a deductible if the other driver is at fault?
It depends on how the claim is handled. Ask your insurer how it works for your policy and state.
General information only, not financial, legal or insurance advice. Rules, prices and benefits vary by state and by policy. A licensed professional can explain what applies to you.