Your deductible is the amount you pay out of pocket before insurance pays on a covered collision or comprehensive claim. It is also one of the easiest levers to change your premium.
The Basic Trade-Off
A higher deductible means you take on more of the risk, so the carrier usually charges less. A lower deductible means less out of pocket at claim time, but a higher premium. The size of the difference varies by carrier, vehicle and driver, which is why quotes are worth comparing.
Which Coverages Have Deductibles?
- Collision – crashes with another vehicle or object.
- Comprehensive – theft, hail, fire, vandalism, glass and animal strikes.
Liability coverage does not have a deductible, because it pays other people's losses.
How to Choose
- Can you comfortably pay it tomorrow? Choose a deductible you could cover from savings without stress. A discount is worthless if you cannot afford a claim.
- Look at the savings per step. Going from $250 to $500 may save more than going from $1,000 to $2,000. We can show you each option.
- Consider your vehicle's value. On an older car, a very high deductible leaves little to recover in a total loss.
- Match your lender's rules. Some lenders cap the deductible on financed or leased vehicles.
Smart Strategies
Many drivers carry a higher collision deductible and a lower comprehensive or glass deductible, since small glass and weather claims are more common. Keep the difference in a dedicated emergency fund so a deductible never becomes a surprise.
Will a Claim Raise My Rates Anyway?
Possibly. Some claims affect your premium at renewal. If a repair costs only slightly more than your deductible, it can be worth paying out of pocket. Call us before you file and we will talk it through.