Car Insurance Deductibles

A good deductible for auto insurance is an amount you can afford after an accident or unexpected event, although most drivers pick an average deductible of $500. Other common auto insurance deductibles are $250 and $1,000, but drivers should take several factors into account before deciding which one is right for them. These include what premium they can afford and how likely they are to file a claim.  

Since policies with a lower deductible cost more, it can be tempting to choose a high deductible. But your deductible shouldn't be more than you can comfortably afford to pay out of pocket if your car is damaged. If your deductible is too high, you could be putting yourself in a difficult financial position down the road.

You can choose different deductibles for separate types of coverage, so you should consider how likely you are to file each type of claim. For example, if you live an in an area that is prone to natural disasters, consider getting a comprehensive insurance policy with a low deductible. Similarly, if you've never had an accident and you live in a low-traffic area, consider choosing a high-deductible for your collision insurance policy.

Every driver's financial situation is different, so there is no such thing as a one-size-fits-all deductible. To learn more, check out WalletHub's guide to car insurance deductibles.

After an accident or unexpected event, you will have to pay a deductible before your insurer covers the remaining cost to repair or replace your vehicle. Car insurance deductibles work the same way for every type of car insurance coverage including collision and comprehensive, and they are very similar to deductibles for health insurance, homeowners insurance, and business insurance.

For example, if you file a claim for $1,500 and you have a $500 deductible, your insurer will only pay out $1,000. However, if the total cost of damage after an accident is less than your deductible, you'll have to pay for all of it out of pocket.

The average car insurance deductible amount is $500, though deductibles can range from $100 to $2,000.

How Car Insurance Deductibles and Premiums Work Together

The higher the car insurance deductible you choose, the lower your premiums will generally be. While you can consider increasing your deductibles if your premiums are too high, you should also consider the monthly savings in comparison to how much more you would have to pay if an accident occurred.  

How Car Insurance Deductibles Affect Premiums

Note: This is for a hypothetical six-month collision policy with Progressive

When You Have to Pay Car Insurance Deductibles

If you are found to be at fault for an accident – either fully or partially – you'll likely need to pay your deductible in order to use your own insurance to cover your costs. 

On the other hand, if you are not at fault, you typically won't need to pay any deductibles since the at-fault driver's liability insurance will pay for your vehicle repairs and medical costs. However, if your damages exceed their policy's limits, you may need to pay a deductible if you seek to use your own insurance to cover the rest. Luckily, it is possible for you to recover that cost in civil court.

When Car Insurance Deductibles Do Not Apply

Deductibles never apply to liability car insurance, only to some other types of coverage like collision insurance and comprehensive coverage. 

Three states also make deductibles illegal for windshield replacements and repairs under a comprehensive policy. Those states are Florida, Kentucky, and South Carolina.

To learn more, check out WalletHub's guide to car insurance deductibles.

The average car insurance deductible is $500. In general, the most common car insurance deductibles are $500 and $1,000, but drivers can usually choose any amount between $100 and $2,000 when they purchase their auto policy.

The deductible amount that you choose should be based on what you can afford to pay if your vehicle is unexpectedly damaged. Higher deductible policies tend to have lower premiums, but if you choose a deductible that you can't afford, you risk being unable to actually use your insurance coverage when you need it.

To learn more, check out WalletHub's guide to car insurance deductibles.

If you can't pay your car insurance deductible, you won't be able to file a car insurance claim to have vehicle damage or medical bills paid for by your insurance company. Instead, you will need to set up a payment plan with a mechanic, take out a loan, or save up until you can afford the deductible. On the other hand, in the case of an accident that you did not cause, you can immediately file your claim with the at-fault driver's liability insurance to avoid paying a deductible altogether.  

If you need to wait to file a claim, you'll have anywhere from 30 days to a few years, depending on your state and insurance company. Once you file a claim with your own insurer, there is almost no way to avoid paying your deductible. Even if the insurer doesn't require you to pay the deductible upfront, they will subtract the amount from their final payment, leaving you responsible for any remaining balance.

Your best option is to negotiate a payment plan with the mechanic before they start repairs. This is key because mechanics might not repair your car until they get paid, or they might keep the repaired vehicle until your debt is settled.

It's rare for mechanics to waive the remaining balance – your deductible – altogether, even if they're already making a large profit. It's also considered insurance fraud if a mechanic overcharges your insurance company to compensate for a waived deductible.

Since your options are limited when you can't pay your car insurance deductible, it's important to pick a deductible that you can afford when buying a policy. To learn more, check out WalletHub's guide to car insurance deductibles.

A $1,000 deductible means you will have to pay at least that amount out of pocket before your insurance company will pay for the rest. In most cases, your insurance company will pay the claim amount, minus the $1,000 deductible, directly to you or a third-party who is owed for services.

$1,000 Deductible in Car Insurance

In car insurance, having a $1,000 deductible means that you'll need to pay $1,000 of your claim yourself, whether it is a collision insurance claim or a comprehensive insurance claim. Your car insurance company will pay the mechanic or auto body shop directly for the amount needed, minus your deductible.

If the damage to your vehicle is less than $1,000, you'll have to pay for it entirely out of pocket. Your insurance company will not pay for any claims that cost less than your deductible.

A $1,000 deductible also means lower premiums, in most instances. The higher a deductible is, the cheaper the premiums become. The most common deductible amount is $500, but many insurers offer deductibles ranging from $100 to over $2,000.

$1,000 Deductible in Other Types of Insurance

Health insurance and homeowners insurance use deductibles in exactly the same way as car insurance. You pay the deductible, and your insurance company covers the rest. While $1,000 is a common deductible for homeowners insurance, deductibles for health insurance tend to be a bit more expensive.   

To learn more, check out WalletHub's guide to car insurance deductibles.

A $1,000 deductible is better than a $500 deductible if you can afford the increased out-of-pocket cost in the event of an accident, because a higher deductible means you'll pay lower premiums. Choosing an insurance deductible depends on the size of your emergency fund and how much you can afford for monthly premiums.

How to Choose Between a $500 and a $1,000 Deductible

1. Figure out how much you would save on your premium with a $1,000 deductible.

The goal is to determine if those savings are worth paying an extra $500 out of pocket after an accident. Car insurance companies typically use a $500 deductible to give quotes, which means you'll need to make a point of checking how things change with a $1,000 deductible.

Remember that the premium savings will not always be proportional to the extra out-of-pocket costs after an accident. For example, Progressive reports that doubling your deductible from $500 to $1,000 may result in only a 28% decrease in premiums on average.

2. Consider how much you could afford to pay if an accident happened today.

Accidents can happen at any moment, so if you don't have a lot of savings or expendable income, a lower deductible is usually a safer choice to avoid financial stress after an accident.

3. Determine your car's actual cash value.

If you have an old car that's only worth $2,500, for example, you don't want to carry a deductible of $1,000. It's too close to the total value of your vehicle, which means the replacement cost wouldn't put much more stress on your finances than the deductible itself.

4. Make a decision based on your financial situation and preferences.

After evaluating your income, monthly expenses, savings, available credit and car value, it should be clear which is a better deal for you: saving monthly on premiums or saving in the event of an accident.

Although $500 and $1,000 are the most common deductibles, you may want to consider other deductible amounts, too. Some companies offer lower and higher options, such as $100, $250 or $2,500 deductibles.

No matter what you decide, be sure to set aside enough cash to cover your deductible before you need to make a claim. To learn more, check out WalletHub's guide to car insurance deductibles.

You have to pay a car insurance deductible when you file a claim with your own car insurance company after most types of incidents. For example, if you cause an accident that damages your vehicle, you will need to file a claim with your own collision insurance and pay your collision deductible.

Some types of coverage, like liability insurance and MedPay, never require deductibles, though.

You'll Have to Pay a Car Insurance Deductible If:

• You use your personal injury protection to pay for your own medical expenses, regardless of fault.
• You use your collision insurance to pay for your vehicle damage after an accident you caused.
• You use your comprehensive insurance to pay for non-accident-related damage to your vehicle, such as from theft or a natural disaster.
• You use your uninsured motorist property damage insurance to pay for your vehicle damage if you're in an accident with an uninsured or underinsured driver.
• You use your collision insurance as supplemental coverage if you are not at fault.
• You and another driver share the fault for an accident.

In some situations, you may need to use your own collision insurance to repair your vehicle while the insurance adjusters determine who is at fault. Although you may need to pay your deductible initially in that case, your insurance company will recover your deductible from the at-fault driver through subrogation if you are found to be not at fault.

You Will Not Have to Pay a Deductible If:

• You are not at fault for an accident. The at-fault driver's liability insurance will cover your property damage and medical expenses.
• Another driver files a claim with your insurance. You do not have to pay a deductible for your liability insurance to cover them.
• You use MedPay to cover your own medical expenses, regardless of fault.
• You use uninsured motorist bodily injury coverage after an accident with an uninsured or underinsured driver.

Also, if you are using your comprehensive insurance to cover windshield damage, some states mandate that the deductible must be waived.

To learn more, check out WalletHub's guide to car insurance deductibles.

You can avoid paying your car insurance deductible for vehicle repairs if the mechanic agrees to waive it, which is possible but highly unlikely. In some cases, your insurer may also waive your comprehensive deductible for glass repair specifically. Otherwise, if you are filing a car insurance claim with a type of coverage that has a deductible, you have to pay it.

Types of Car Insurance That Don't Require a Deductible

Not every insurance claim requires you to pay a deductible. For example, many insurers waive comprehensive deductibles for glass repair, and some states allow drivers to choose a separate $0 glass deductible.

In addition, if you are in an accident and another driver is at-fault, your costs will be covered by their liability insurance, which doesn't require you to pay anything out of pocket. If you choose to use your collision coverage or personal injury protection insurance to cover immediate costs, you will have to pay your deductible. However, your insurance company will eventually recoup your costs from the at-fault driver's insurer.

On the other hand, you may have to pay a deductible if you are hit by an uninsured motorist and have to use your uninsured motorist property damage insurance, though it usually depends on your state.

What To Do If You Can't Afford Your Car Insurance Deductible

If you want to file a claim but cannot pay your deductible, you have a few options. You can set up a payment plan with the mechanic, put the charge on a credit card, take out a loan, or save up until you can afford the deductible. Depending on your state and insurance company, you could have anywhere from 30 days to a few years to file a car insurance claim after an accident.

Because it's almost impossible to avoid paying your car insurance deductible in situations where it actually applies, it's important that you pick a deductible amount you can afford. To learn more, check out WalletHub's guide to car insurance deductibles.

A good comprehensive deductible is an amount that the policyholder can afford to pay if their vehicle is suddenly damaged by something other than a car accident, such as vandalism or a natural disaster. Comprehensive insurance deductibles typically range from $100 to $1,000, but they can sometimes be as high as $2,500. You choose your deductible when you purchase your policy, and the higher the deductible is, the lower your premium will be.

Comprehensive Deductible Example

As a reminder, a comprehensive deductible is the amount that you have to pay out-of-pocket when filing a comprehensive insurance claim. For example, if a hailstorm causes $5,000 in damage to your car and you have a $1,000 deductible, your insurance company will only pay $4,000 for the repairs.

How to Choose Your Comprehensive Deductible

Before you decide on a deductible, you should consider how likely you are to file a comprehensive claim. If you live in an area that is prone to natural disasters or has a high crime rate, for instance, it may be a good idea to get a low comprehensive deductible.

A collision insurance deductible is the amount of money that a driver must pay out-of-pocket when filing a collision insurance claim. Collision insurance pays to repair or replace a car damaged in an accident, and a driver must pay their collision deductible before their insurance company will cover the remaining costs.

Collision Deductible Example

Say you are at fault in an accident that causes $10,000 in damage and you have a collision deductible of $1,000. You are responsible for covering your $1,000 collision deductible out-of-pocket in order for your insurance company to pay the remaining $9,000.

Collision Deductible Amounts

Collision deductibles typically range from $100 to $1,000, and you select your deductible amount when you purchase your policy. The higher your deductible, the cheaper your premium will be. Although it's tempting to get a higher deductible in order to pay less upfront, you should only choose a deductible that you can afford to pay if your car is suddenly damaged in an accident.