Jeffrey Johnson is a legal writer with a focus on personal injury. He has worked on personal injury and sovereign immunity litigation in addition to experience in family, estate, and criminal law. He earned a J.D. from the University of Baltimore and has worked in legal offices and non-profits in Maryland, Texas, and North Carolina. He has also earned an MFA in screenwriting from Chapman Univer...

Full Bio →

Written by

Laura Walker graduated college with a BS in Criminal Justice with a minor in Political Science. She married her husband and began working in the family insurance business in 2005. She became a licensed agent and wrote P&C business focusing on personal lines insurance. Laura serviced existing business and wrote new business. She now uses her insurance background to help educate drivers about...

Full Bio →

Reviewed by Laura Walker
Licensed Agent for 10 Years

UPDATED: Mar 18, 2019

Advertiser Disclosure

It’s all about you. We want to help you make the right coverage choices.

Advertiser Disclosure: We strive to help you make confident auto insurance decisions. Comparison shopping should be easy. We are not affiliated with any one auto insurance provider and cannot guarantee quotes from any single provider. Our partnerships don’t influence our content. Our opinions are our own. To compare quotes from many different companies please enter your ZIP code on this page to use the free quote tool. The more quotes you compare, the more chances to save.

Editorial Guidelines: We are a free online resource for anyone interested in learning more about auto insurance. Our goal is to be an objective, third-party resource for everything auto insurance-related. We update our site regularly, and all content is reviewed by auto insurance experts.

Car insurance deductibles are part of every car insurance policy but how much you will pay depends on the type of claim filed, your policy details and your car insurance company.

Auto insurance deductibles play a large role in the risk formula used by car insurance companies as studies show that drivers with higher deductibles tend to file lower claims. When you purchase a car insurance policy most insurers have a default deductible ($250 or $500) and provide options where the policyholder can either increase or decrease this amount.

Use our FREE quote tool to compare insurance rates today!

How does a car insurance deductible work?

Whenever you file a claim for insured damages the car insurance company expects you to pay a set amount of money for the damages before your insurance coverage kicks in. Let’s say for example you have $5,000 damage to your vehicle and your car insurance deductible is $500.

The car insurance company will pay $4,500 towards the cost of damages and you will be responsible for $500. Think of a car insurance deductible as an out-of-pocket cost whenever you file a claim.

Do I always have to pay a deductible when I file a claim?

No. Some car insurance companies have exclusions where they waive any deductible for certain types of insured events. For example some of the most common events which do not require any out-of-pocket cost are:

  • Total Loss – Many car insurance companies waive deductibles when a total loss claim is filed
  • All Damaged Vehicles are insured by the same company – If you happen to have a car accident with someone who happens to be insured by the same company the policy deductible is often waived by select insurers
  • Good Driver Rewards – Some car insurance companies reward drivers who have not filed a claim by reducing their deductible annually or waiving the cost altogether for the first car accident.

Whether or not you have to pay a car insurance deductible will entirely depend on your policy details and car insurance company but never assume there is no out-pocket-cost in a car accident.

FREE Auto Insurance Comparison

Compare quotes from the top auto insurance companies and save!

 Secured with SHA-256 Encryption

Can I choose a lower deductible?

Yes but what a lot of consumers do is choose a HIGHER deductible and take advantage of lower auto insurance rates. Statistics show that drivers who have a higher out-pocket cost are less likely to file a car insurance claim which reduces the financial risk to a car insurance company.

Both of these factors can lead to big discounts on auto insurance however you also need to be prepared to pay the full out-of-pocket cost in the event of a car accident or your vehicle may never be repaired.

How much money can I save with a Higher Car Insurance Deductible?

This depends on your insurance provider and you overall risk profile but choosing a higher car insurance deductible can generally lead to up 10% or more off standard auto insurance rates.

Finding affordable auto insurance is fairly easy for most drivers but the only way to get the best coverage is to learn about coverage and then shop around to compare car insurance quotes.

Answers to small questions such as these can save you a bunch of money but if you never take the time to learn how can you save money on car insurance?

View our Auto Insurance 101 guide, learn about car insurance discounts and read answers to some popular questions. When you’re ready simply enter your ZIP code to start a car insurance comparison search online.

Use our FREE quote tool to compare insurance rates today!