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PhotoAlto/Ale Ventura/Getty Images October 13, 2022 Checkmark Bankrate logo How is this page expert verified? At Bankrate, we take the accuracy of our content seriously. "Expert verified" means that our Financial Review Board thoroughly evaluated the article for accuracy and clarity. The Review Board comprises a panel of financial experts whose objective is to ensure that our content is always objective and balanced. Their reviews hold us accountable for publishing high-quality and trustworthy content. Mandy Sleight has been a licensed insurance agent since 2005. She has three years of experience writing for insurance websites such as Bankrate, MoneyGeek and The Simple Dollar. Mandy writes about auto, homeowners, renters, life insurance, disability and supplemental insurance products. Mariah Posey is an auto and homeowners insurance writer and editor for Bankrate.com. She aims to make the insurance journey as convenient as possible by keeping the reader at the forefront of her mind in her work. Mark Friedlander is director of corporate communications at III, a nonprofit organization focused on providing consumers with a better understanding of insurance. Bankrate logo The Bankrate promise
At Bankrate, we strive to help you make smarter financial decisions. To help readers understand how insurance affects their finances, we have licensed insurance professionals on staff who have spent a combined 47 years in the auto, home and life insurance industries. While we adhere to strict editorial integrity, this post may contain references to products from our partners. Here's an explanation of how we make money. Our content is backed by LLC, a licensed entity (NPN: 19966249). For more information, please see our Insurance Disclosure. Bankrate logo The Bankrate promise
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Coverage.com, LLC is a licensed insurance producer (NPN: 19966249). Coverage.com services are only available in . Coverage.com may not offer insurance coverage in all states or scenarios. All insurance products are governed by the terms in the applicable insurance policy, and all related decisions (such as approval for coverage, premiums, commissions and fees) and policy obligations are the sole responsibility of the underwriting insurer. The information on this site does not modify any insurance policy terms in any way. A car insurance deductible is the amount you are responsible to pay out of pocket when filing a claim while the insurance company pays towards the remaining covered repairs or replacement. Setting a deductible you can afford is important because a claim could occur at any time. If you cannot afford the deductible, it could delay necessary repairs and prevent you from having a working vehicle to drive. Bankrate is helping drivers understand what an auto insurance deductible is, when to expect to pay one and the factors to consider when choosing a deductible so you can make the right choice for your financial situation. Compare rates and save on auto insurance today! Get quotes Close X RatesRates keep going up in 2022. Compare rates and save on auto insurance today! Get quotes Close X This advertisement is powered by Coverage.com, LLC, a licensed insurance producer (NPN: 19966249) and a corporate affiliate of Bankrate. The offers and links that appear on this advertisement are from companies that compensate Coverage.com in different ways. The compensation received and other factors, such as your location, may impact what offers and links appear, and how, where and in what order they appear. While we seek to provide a wide range of offers, we do not include every product or service that may be available. Our goal is to keep information accurate and timely, but some information may not be current. Your actual offer from an advertiser may be different from the offer on this advertisement. All offers are subject to additional terms and conditions. Compare auto insurance rates
Answer a few questions to see personalized rates from top carriers. Save on auto insurance with quotes from trusted providers like: Drivers switch & save an average of $750+/year Arrow Right Are you overpaying for auto insurance? Arrow Right Safe drivers choose Allstate Arrow Right Powered by Coverage.com (NPN: 19966249) Coverage.com, LLC is a licensed insurance producer (NPN: 19966249). Coverage.com services are only available in . Coverage.com may not offer insurance coverage in all states or scenarios. All insurance products are governed by the terms in the applicable insurance policy, and all related decisions (such as approval for coverage, premiums, commissions and fees) and policy obligations are the sole responsibility of the underwriting insurer. The information on this site does not modify any insurance policy terms in any way. See more providers in Choose from insurers in Show More RATE INCREASE ALERT Rates increased up to 12% this year
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Answer a few questions to see personalized rates from top carriers. Save on auto insurance with quotes from trusted providers like: Drivers switch & save an average of $750+/year Arrow Right Are you overpaying for auto insurance? Arrow Right Safe drivers choose Allstate Arrow Right Powered by Coverage.com (NPN: 19966249) Coverage.com, LLC is a licensed insurance producer (NPN: 19966249). Coverage.com services are only available in . Coverage.com may not offer insurance coverage in all states or scenarios. All insurance products are governed by the terms in the applicable insurance policy, and all related decisions (such as approval for coverage, premiums, commissions and fees) and policy obligations are the sole responsibility of the underwriting insurer. The information on this site does not modify any insurance policy terms in any way. See more providers in Choose from insurers in Show More What is an auto insurance deductible
A car insurance deductible is the amount of money you agree to pay out of pocket for car repairs or replacement after an accident. Keep in mind that a deductible would not apply for minimum coverage policies. If you have full coverage with either comprehensive or collision coverage, or both, your deductible would apply. For example, if you are involved in an accident causing $5,000 of damage to your vehicle, and you have a $500 collision deductible, the insurance company would pay $4,500 of the claim while you are responsible for $500. You determine your auto insurance deductible amount with your insurance agent or carrier before finalizing your . However, you should have the option to change your deductible at any time. What types of car insurance deductibles are there
Your auto insurance policy is a package of different coverages. Some coverages, like liability, pay the other party for injuries and damages if you cause an accident. But other coverages — such as comprehensive, collision, personal injury protection and uninsured motorist property damage — exist to help cover injuries to those in your vehicle and damage to your car. These coverages may have deductibles, or at least the option to include a deductible to reduce the . Here are a few coverages that usually have a deductible or the option to choose one: Collision
pays for damage to your vehicle resulting from a collision with an object (e.g., telephone pole, guard rail, mailbox, building) when you are at-fault. While collision coverage typically will not reimburse you for or normal wear-and-tear on your car, it would cover damage from potholes or from rolling your vehicle. The average cost of collision coverage is , according to the Insurance Information Institute (Triple-I). If you file a claim for damage to your vehicle under collision coverage, the collision deductible on your policy will apply. Comprehensive
provides protection against theft and damage to your vehicle caused by an incident other than a collision. This includes fire, flood, vandalism, hail, falling rocks or trees and other hazards, such as hitting an animal. According to the Triple-I, the average cost of comprehensive coverage is just over $134 annually. If you file a claim for damage to your vehicle under comprehensive coverage, the comprehensive deductible on your policy will apply. While there are many instances in which a deductible can apply, there are some scenarios where your comprehensive deductible does not apply. For example, if you have a , your insurer would repair the damage with no deductible in Florida, Kentucky and South Carolina. Some insurers offer zero-deductible comprehensive coverage, which means you would not pay anything if you filed a claim for any comprehensive damage but your premium would be higher. Uninsured underinsured motorist property damage
If you are involved in an accident with an uninsured driver or one without enough coverage to pay for your car’s damage, or in the case of a hit-and-run, you may be able to file a claim under your or underinsured motorist property damage coverage. This coverage is not available in every state, but it may have a state-mandated deductible amount in those where it is. In the cases where a deductible applies, it is generally low, between $100 to $300. Personal injury protection
Depending on your state, you may have coverage on your policy. This coverage helps pay for medical expenses for you and all passengers in your vehicle. It can also help cover expenses related to lost wages or if you need someone to do household tasks after an accident because you cannot do so. Depending on your state, you may have a deductible that applies if filing a claim under this coverage. Many states with PIP deductibles provide several options to choose from, and the deductible you choose can impact your premium. What car insurance coverage types do not require a deductible
is required in most states and helps cover injuries and property damage for the other party or parties if you are at fault in an accident. When you buy liability coverage, you will choose a specific amount of coverage. These coverage limits are the maximum amount the insurance company will pay the other party for a covered claim. Because liability coverage extends to others to whom you injure or cause damage, there is no deductible. If you choose optional coverage types like or , there is generally no deductible, though there may be coverage limits and caps on the amount of claims you can file for these add-ons. What is the average car insurance deductible
The average annual cost of car insurance for full coverage is $1,771 per year with a $500 deductible for comprehensive and collision coverage. If you increase the to $1,000 for each coverage, it could save you a couple hundred dollars annually. However, depending on how to adjust either deductible to be higher or lower — especially if you don’t keep them the same amount — you could also experience a premium increase. Many drivers carry policies with $500 comprehensive and collision deductibles, but there are plenty of other deductible amounts available. The deductible options available to you will typically depend on the and policy you’re considering. It’s also worth noting that your comprehensive and collision deductibles do not have to match, and it is quite common to have one deductible that’s higher than the other. In general, the higher the deductibles for your comprehensive and collision, the lower your overall premiums will generally be. What your car insurance deductible ends up being will depend highly on your budget and how much you can afford to pay out of pocket if you need to make a claim for covered repairs to your vehicle. Car insurance deductibles are generally offered in amounts that include: $0 $100 $250 $500 $1,000 $1,500 $2,000 $2,500 Factors to consider when choosing a car insurance deductible
With so many choices in deductible levels available, you may be wondering how to choose the right one. It may be helpful to consider the following as you shopping for a car insurance policy: Do you want to pay less for car insurance or repairs
A higher deductible will generally , but you will pay higher out-of-pocket costs if you file a claim for damage to your vehicle. Some claims may even be covered under your deductible and you might have to pay the entire amount out of pocket if you filed. For example, if you back into a tree and do $350 worth of damage to your vehicle and your collision deductible is $1,000, you will pay out of pocket for all the repairs. If you opt for a lower deductible, your will likely be higher, but you would have lower out-of-pocket costs if you file a claim. If your deductible is $100 and you cause that $350 damage by backing into a tree, you would only have to pay your $100 deductible, while your insurance would pay the other $250. However, you could spend more on your premium by having a lower deductible and never end up filing a claim. This is the nature of having insurance coverage and an example of the risk both you and the insurer take on. How much can you afford to pay out of pocket
Before you choose a deductible, it is important to figure out what you can afford to pay if your car is damaged in an accident. If that amount is $500, you probably should not choose a deductible higher than $500. If you do, you may not be able to afford to fix your vehicle if you are at fault and need to pay the deductible for repairs. Learn more: Does your lender have deductible requirements
If your vehicle is financed or leased, you will probably need to carry comprehensive and collision coverages for your vehicle. If that is the case, you will need to choose deductibles for each. Some lenders will have a maximum deductible that you are allowed to carry for comprehensive and collision. It is important to check with the financial institution that handles your loan or lease to determine if these restrictions exist. When are you not required to pay your car insurance deductible
There will be occasions when you are not required to pay your deductible, but those are few and far between. In general, you will not be required to pay your deductible when: Another driver is at fault
If another driver is at fault for hitting you and they are insured, you should not be responsible for paying a deductible on the claim that you file through their insurance company. Your deductibles only apply when filing a claim with your insurer. If you have a diminishing deductible
Some insurance companies offer a diminishing deductible, or , option. If you have this policy feature, the longer you go without an accident results in a reduction in the amount you would have to pay for your deductible. Usually, it is a $100 credit applied towards your deductible amount each year you are accident-free. So, for example, if you have a $500 collision deductible and do not have an accident for four years, you could receive a $100 reduction every year. Then, if you needed to file a claim, your deductible would be $100 instead of the original $500. Once you use your diminishing deductible, there is usually a time period to qualify for it again. Speak with your insurance agent or carrier representative to see if this feature is available and their criteria. Frequently asked questions
Do you pay a deductible if you hit another car
There are a few on your policy that could respond to you hitting another vehicle when you are at-fault for the accident. Your bodily injury liability and property damage liability would pay for the damages to the other party, and those coverage types do not have a deductible. But if you have collision coverage and you want the insurance company to step in to cover the repairs to your vehicle, you would have to pay your collision deductible.
Do you pay a deductible if you are not at fault
This depends on the circumstances. If the accident was the other driver’s fault, their liability coverage should pay for your damages and you should not have to pay a deductible. However, if the other driver is uninsured or underinsured, you may be responsible for paying a deductible depending on how your coverage applies to cover the expenses. If you are hit by another driver whose insurance company denies the claim, or if you are involved in a complicated claim that is taking a long time to be settled, you could use your collision coverage to pay for your damages. Your insurance company would pay for your damages, minus your deductible, and then ask the at-fault driver’s insurer to pay the money back in a process called subrogation.
Is it better to have a $500 or $1 000 deductible
It is better to have a deductible you can afford to pay, whether the deductible is $500 or $1,000. If you want a lower premium, consider a higher deductible if you can afford to pay it. However, if a $1,000 deductible is not feasible, then it may make sense to take the lower deductible and pay a higher premium. You can also consider the . For example, if your car is only worth $1,500, setting a $1,000 deductible means your insurance company is only responsible for up to $500 in damages to the vehicle.
What happens is I can t pay my deductible
You may have to pay the deductible prior to work beginning or before you can pick up the car once repaired. Most car insurance companies require you to pay the deductible to the repair shop while the insurer would pay the balance minus your deductible. Setting a deductible you know you could reasonably afford at any time can help prevent you from being without your vehicle for too long or having to rely on other costly alternatives. SHARE: Mandy Sleight has been a licensed insurance agent since 2005. She has three years of experience writing for insurance websites such as Bankrate, MoneyGeek and The Simple Dollar. Mandy writes about auto, homeowners, renters, life insurance, disability and supplemental insurance products. Mariah Posey is an auto and homeowners insurance writer and editor for Bankrate.com. She aims to make the insurance journey as convenient as possible by keeping the reader at the forefront of her mind in her work. Mark Friedlander is director of corporate communications at III, a nonprofit organization focused on providing consumers with a better understanding of insurance. Related Articles