Best Car Insurance with a $500 Deductible (2024)
With a $500 car insurance deductible, you’ll pay less out of pocket if you need to file a claim, but your monthly premiums will likely be higher.
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Written byAmy Beardsley
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3+ years writing about auto, home, and life insurance
7+ years in personal finance and technology
Amy specializes in insurance and technology writing and has a talent for transforming complex topics into easy-to-understand stories.
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Edited bySarah Archambault
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Experienced personal finance writer
Background working with banks and insurance companies
Sarah enjoys helping people find smarter ways to spend their money. She covers auto financing, banking, credit cards, credit health, insurance, and personal loans.
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Updated November 20, 2024
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Table of contents
A car insurance deductible is the amount of money you agree to pay before your insurance company pays for a covered collision or comprehensive claim. Choosing a deductible amount is one of the biggest decisions you’ll make when shopping for car insurance.
For $500 deductible car insurance, the average cost of a six-month full-coverage policy is $1,470, Insurify data shows. Allstate, American Family, and Erie Insurance top the list as some of the best car insurance companies for policies with a $500 deductible.
Quick Facts
NJM offers the cheapest full-coverage policy with a $500 deductible, at $66 per month on average, but it’s only available in New Jersey, Pennsylvania, Ohio, Maryland, and Connecticut.
Car insurance typically costs more with a $500 deductible than if you choose a higher out-of-pocket amount.
Your deductible applies when your collision or comprehensive insurance covers a claim; liability insurance doesn’t have a deductible.
How car insurance deductibles work
When filing a claim for damage to your vehicle, your insurer typically requires you to pay a deductible before it picks up the remaining costs. You select the deductible amount when enrolling in your car insurance policy. Common options are $250, $500, and $1,000.[1]
Auto insurance deductibles are a way to share the financial risk between you and your insurance company. They apply to damage claims for your vehicle, not liability insurance claims, and you’ll pay them each time you file a claim.
A higher deductible can help you get a lower car insurance rate. But it means you’ll have to dig deeper into your wallet in case of an accident, so make sure you’re comfortable with the deductible amount you choose.[2]
Keep in mind if you have both collision coverage (for car crashes) and comprehensive coverage (for non-collision events), you might have two separate deductibles.
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Cheapest car insurance with a $500 deductible
In the table below, you can see 10 of the cheapest car insurance companies for a full-coverage policy with a $500 deductible, according to Insurify data.
Insurance Company ▲▼ | Average Monthly Quote: Full Coverage ▲▼ |
|---|---|
| NJM | $66 |
| Auto-Owners | $94 |
| Erie | $109 |
| Root | $113 |
| USAA | $115 |
| Mile Auto | $123 |
| State Farm | $133 |
| GEICO | $137 |
| Safeco | $145 |
| Allstate | $159 |
Disclaimer: Table data sourced from real-time quotes from Insurify's 50-plus partner insurance providers. Actual quotes may vary based on the policy buyer's unique driver profile.
Best car insurance with a $500 deductible
You pay for your auto insurance coverage through regular premium payments, as well as a set out-of-pocket deductible if you file a comprehensive or collision claim for covered damages. If you buy a policy with a $500 deductible, you’ll owe $500 any time you file a claim for a car accident or other covered damages.
Some top insurers that offer policies with a $500 deductible include NJM, Erie, and GEICO.
NJM: Cheapest rates
Regional insurer NJM provides some of the most affordable $500 deductible full-coverage policies. With an average cost of $66 per month, it’s a good balance between affordable premiums and quality coverage. You’ll find several discounts to keep rates low, including bundling, multi-car, and good student discounts.
Pros
Cheapest rates for policies with a $500 deductible
Above-average J.D. Power claims satisfaction rating
Offers gap insurance and rideshare coverage
Cons
Available in only five states
Not all discounts available in all states
Not as many add-on coverages as some other insurers
Erie Insurance: Best for customer service
| User Reviews | 4.1 |
|---|---|
| IQ Score The Insurify Quality (IQ) Score uses more than 15 criteria to objectively rate insurance companies on a one-to-ten scale. The Insurify editorial team researches insurer data to determine the final scores. | 9.0 /10 |
| Liability Only Liability-only insurance, sometimes called minimum-coverage insurance, pays for bodily injury and property damage to others in an accident the policyholder causes. It does not pay for the insured’s own damages. | $50/mo |
| Full Coverage Full-coverage car insurance generally includes liability, collision, and comprehensive coverage, and may include other optional coverages such as uninsured motorist coverage. Collision covers a policyholder’s repair or replacement costs in case of an accident. Comprehensive covers damages caused by non-accident events. The average quote displayed here reflects policies with the following coverage limits: $50,000 bodily injury liability per person; $100,000 bodily injury liability per accident; $50,00 property damage liability per accident; $1,000 collision deductible; and a $1,000 comprehensive deductible. | $93/mo |
4.1
Best choiceBased on 240 verified guest reviews and ratings
How drivers feel about Erie Insurance
Drivers appreciate the excellent customer service, fair pricing, and responsive assistance. However, some are unhappy with unexpected rate increases and policy cancellations.
AI-generated from the text of verified reviews collected by Insurify
Best For
High customer satisfaction
Competitive rates
Optional coverages
How drivers feel about Erie Insurance
Drivers appreciate the excellent customer service, fair pricing, and responsive assistance. However, some are unhappy with unexpected rate increases and policy cancellations.
AI-generated from the text of verified reviews collected by Insurify
Best For
High customer satisfaction
Competitive rates
Optional coverages
Reviews (126)
Lana
November 10, 2024
Verified Review
Erie Insurance
The policy is difficult to understand. The rates are too high.
George
November 6, 2024
Verified Review
Good People
They handled my claim quickly.
Judie
November 4, 2024
Verified Review
Great Coverage
The coverage is excellent, but I am looking for a cheaper rate.
JD Power
J.D. Power data measures overall customer satisfaction and claims satisfaction based on a 1,000-point scale.
870NAIC Index
Average amount of customer complaints relative to competitors on a 0-5 scale. A lower score represents fewer complaints.
0.49A.M. Best
A.M. Best analyzes an insurer’s financials, operating performance, business profile, and other factors to generate an opinion-based rating of a company’s financial and credit strength. Ratings range from A++ (exceptional) to D (poor).
A+Why we picked this company
Erie is a top choice if you value excellent customer service alongside your $500 deductible. The regional insurance company has 14,000 licensed insurance agents and ranks highest in J.D. Power’s 2024 U.S. Insurance Shopping Study. It also earns high marks for claims satisfaction, ensuring a smooth experience if you need to file an insurance claim.
Pros
Excellent customer service
High J.D. Power claims satisfaction rating
Local agents for personalized service
Cons
Available in only 12 states and Washington, D.C.
Fewer digital tools than some insurers
Not as many discounts as some competitors
GEICO: Best for discounts
| User Reviews | 4.0 |
|---|---|
| IQ Score The Insurify Quality (IQ) Score uses more than 15 criteria to objectively rate insurance companies on a one-to-ten scale. The Insurify editorial team researches insurer data to determine the final scores. | 9.0 /10 |
| Liability Only Liability-only insurance, sometimes called minimum-coverage insurance, pays for bodily injury and property damage to others in an accident the policyholder causes. It does not pay for the insured’s own damages. | $54/mo |
| Full Coverage Full-coverage car insurance generally includes liability, collision, and comprehensive coverage, and may include other optional coverages such as uninsured motorist coverage. Collision covers a policyholder’s repair or replacement costs in case of an accident. Comprehensive covers damages caused by non-accident events. The average quote displayed here reflects policies with the following coverage limits: $50,000 bodily injury liability per person; $100,000 bodily injury liability per accident; $50,00 property damage liability per accident; $1,000 collision deductible; and a $1,000 comprehensive deductible. | $119/mo |
4.0
Best choiceBased on 10271 verified guest reviews and ratings
How drivers feel about GEICO
Drivers appreciate the excellent customer service and initial low prices but dislike the frequent price increases.
AI-generated from the text of verified reviews collected by Insurify
Best For
Teen drivers
Cheap rates
Accident forgiveness
How drivers feel about GEICO
Drivers appreciate the excellent customer service and initial low prices but dislike the frequent price increases.
AI-generated from the text of verified reviews collected by Insurify
Best For
Teen drivers
Cheap rates
Accident forgiveness
Reviews (5,647)
James
November 19, 2024
Verified Review
Unsatisfactory Experience with Geico
Steer clear. They increase your rate at every renewal.
Edward
November 18, 2024
Verified Review
Experience with Geico
Reliable.
Chris
November 18, 2024
Verified Review
Poor
The customer service is below average and terrible.
JD Power
J.D. Power data measures overall customer satisfaction and claims satisfaction based on a 1,000-point scale.
835NAIC Index
Average amount of customer complaints relative to competitors on a 0-5 scale. A lower score represents fewer complaints.
0.74A.M. Best
A.M. Best analyzes an insurer’s financials, operating performance, business profile, and other factors to generate an opinion-based rating of a company’s financial and credit strength. Ratings range from A++ (exceptional) to D (poor).
A++Why we picked this company
GEICO has a lot of discounts, making it a great option for budget-conscious drivers. You’ll find savings for good driving, having certain safety features in your car, getting good grades, insuring more than one car, bundling policies, being a military member, and more. These savings support competitive rates for $500 deductible car insurance without sacrificing coverage options. It’s also available in all 50 states and Washington, D.C.
Pros
Numerous discounts
Easy online policy management
A++ (Superior) financial strength rating from AM Best
Cons
Below-average J.D. Power claims satisfaction rating
Higher rates for high-risk drivers
Few options to customize coverage
Why deductibles affect premiums
When you select a higher deductible, such as $1,000 instead of $500, you lower your premium because you’re agreeing to pay for more of the initial costs when you file a claim. This shifts some of the financial risk from the insurance company to you, allowing them to charge you less for your policy — 15%–40% less, according to the Insurance Information Institute.[3]
For example, suppose you have $500 deductible car insurance, and your monthly premium is $245. If you increase your deductible to $1,000, you could potentially shave $37–$98 off your monthly cost. That’s an annual savings of $444–$1,176.
Of course, a high deductible means you’d fork over more cash if you file a claim, so pick an amount of money that won’t strain your finances.
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Cost of $500 vs. $1,000 deductible
Opting for a $1,000 deductible instead of a $500 deductible can be a good option if you have enough savings to cover a bigger bill when you file a claim. A high deductible can reduce your car insurance premiums, but it increases your financial responsibility when filing a claim.
A good rule of thumb is to choose the highest amount you can afford. A $500 deductible might be more manageable for drivers without a large emergency fund, even though a smaller deductible translates into slightly higher insurance premiums.
Here’s a look at how much your monthly rates can change depending on the deductible you choose.
Deductible ▲▼ | Average Quote: Liability Only ▲▼ | Average Quote: Full Coverage ▲▼ |
|---|---|---|
| $500 | $120 | $245 |
| $1,000 | $104 | $204 |
Disclaimer: Table data sourced from real-time quotes from Insurify's 50-plus partner insurance providers and quote estimates from Quadrant Information Services. Actual quotes may vary based on the policy buyer's unique driver profile.
Pros and cons of a $500 deductible
Pros
Pay less up front when filing a comprehensive or collision claim
Easier to fix your car without waiting
Less financial worry in case of an accident
Cons
Higher insurance premiums
Safe drivers may pay more over time
Filing multiple claims with a lower deductible could lead to rate increases and negate any savings
Other ways to lower car insurance costs
You have other ways to lower your premium besides increasing your deductible. If you prefer a lower deductible or have already chosen the highest deductible you can afford, you can try the following strategies to keep your car insurance costs low:
Bundle insurance policies
An insurer might reduce your premium if you buy multiple auto policies or different types of insurance from the company. For example, you can often get a discount for bundling your car insurance with renters or homeowners insurance.
Take a defensive driving course
A defensive driving course can help you improve your skills behind the wheel, and courses usually cost less than $100. Successfully completing a course can earn you a discount of as much as 10% off your premiums, depending on your insurer.
Avoid unnecessary claims
Filing lots of claims can lead to a higher premium down the line, so you may want to pay out of pocket for minor dings or scratches.
Improve your credit
Many insurance companies consider your credit history when they set your premium. Paying down credit balances, paying bills on time, and monitoring your credit report for errors might help raise your score and lower your insurance costs.
Compare prices
The first insurer you approach won’t always offer the most affordable option. You may find a better rate if you get quotes from at least three different insurers.
$500 car insurance deductible FAQs
You have lots of things to think about when choosing an auto insurance policy. Consider speaking to an insurance agent if you have questions about specific policies from a certain car insurance company. Otherwise, find answers to help you navigate the process below.
Is it better to have a lower car insurance deductible?
A lower auto insurance deductible may sometimes work better than a higher one, but it depends on what you can afford. A higher deductible results in lower premiums, but you need to have access to out-of-pocket funds in the event of an accident. Your policy deductible should be an amount you can comfortably pay out of pocket.
Which company has the cheapest full-coverage $500 deductible?
NJM offers the cheapest full-coverage car insurance policy with a $500 deductible, with an average cost of $66 per month.
Is a $500 deductible good for car insurance?
A $500 deductible is a standard option that helps balance lower premiums with manageable out-of-pocket expenses. What’s best for you depends on your individual financial needs.
What is a normal car insurance deductible?
Normal car insurance deductibles range from $250 to $1,000. But $500 is the most common deductible amount, making it a good choice for most drivers.
When do you have to pay the $500 deductible?
You pay the $500 deductible whenever you file a collision or comprehensive claim for covered damages, such as after an accident. Your amount is due before your insurance covers the remaining costs.
Methodology
Insurify data scientists analyzed more than 90 million quotes served to car insurance applicants in Insurify’s proprietary database to calculate the premium averages displayed on this page. These premiums are real quotes that come directly from Insurify’s 50+ partner insurance companies in all 50 states and Washington, D.C. Quote averages represent the median price for a quote across the given coverage level, driver subset, and geographic area.
Unless otherwise specified, quoted rates reflect the average cost for drivers between 20 and 70 years old with a clean driving record and average or better credit (a credit score of 600 or higher).
Liability-only premium averages correspond to policies with the following coverage limits:
- Bodily injury limits between state-minimum rates and $50,000 per person, $100,000 per accident
- Property damage limits between $10,000 and $50,000
- No additional coverage
- Comprehensive coverage with a $1,000 deductible
- Collision coverage with a $1,000 deductible
Quotes for Allstate, Farmers, GEICO, State Farm, and USAA are estimates based on Quadrant Information Services’ database of auto insurance rates.
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Sources
- National Association of Insurance Commissioners. "Does your vehicle have the right protection? Best practices for buying auto insurance."
- Insurance Information Institute. "Understanding your insurance deductibles."
- Insurance Information Institute. "Nine ways to lower your auto insurance costs."
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Amy BeardsleyInsurance Writer
Amy is a personal finance and technology writer. With a background in the legal field and a bachelor's degree from Ferris State University, she has a talent for transforming complex topics into content that’s easy to understand. Connect with Amy on LinkedIn.
Edited bySarah Archambault
Experienced personal finance writer
Background working with banks and insurance companies
Sarah enjoys helping people find smarter ways to spend their money. She covers auto financing, banking, credit cards, credit health, insurance, and personal loans.
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