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You pay for your car insurance coverage through regular premium payments, as well as a set out-of-pocket deductible required if you file a claim for covered damages.[1] If you buy a policy with a $500 deductible, you’ll owe $500 any time you file a claim for an accident or other covered damages.
Some of the top insurers that offer policies with a $500 deductible include Nationwide, Dairyland, and Progressive.
Quick Facts
Nationwide offers the cheapest full-coverage policy with a $500 deductible, at $273 per month on average.
Car insurance premiums typically cost more with a $500 deductible than if you choose a higher out-of-pocket amount.
Getting quotes from at least three insurers can help you find the best deal on a $500 deductible insurance policy.
A car insurance deductible is the amount you have to pay toward a covered loss when you file a claim. When your insurance company pays out a claim, it subtracts your deductible amount from the value of your claim.
“If you ever get in an accident with another car, and the damage for your car is $2,000 and your deductible’s $500, you’re on the hook for that $500,” says Brian Coughlin, account executive at The Morley Agency. “Then the company pays the first dollar after that, so they would then pay the additional $1,500.”
You usually need to pay your deductible when you file a car insurance claim for property damage, but you don’t owe a deductible on liability coverage. You select your deductible when you purchase a car insurance policy. A deductible can range from a few hundred dollars to $1,000 or more.
Premiums for a policy with a $500 deductible generally cost more than premiums for a comparable policy with a higher deductible. But your out-of-pocket costs when you file a claim are capped at $500.
How much does car insurance with a $500 deductible cost?
The cost of a car insurance policy with a $500 deductible depends on the type of policy you choose. For example, collision coverage, which covers the cost of repairs if your car runs into a vehicle or another object, typically costs more than comprehensive coverage, which protects you in the event of theft, vandalism, and other noncollision incidents.
Costs also vary by insurer. Average monthly quotes for full-coverage insurance with a $500 deductible range from $273 with Nationwide to $544 with Liberty Mutual. Beyond cost, you should also consider the types of coverage a company offers, how much coverage you want, and the insurer’s reputation with customers.
Insurance Company
Average Monthly Quote: Full Coverage
Insurify Quality Score
The Insurify Quality (IQ) Score uses more than 15 criteria to objectively rate insurance companies on a one-to-five scale. The Insurify editorial team researches insurer data to determine the final scores.
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.
Insurify uses an in-house, proprietary method to rate and review the best car insurance companies. The Insurify Quality (IQ) Score uses more than 15 crucial criteria, including average premiums, customer satisfaction, discounts, third-party ratings, and more, to calculate a final score for a company.
Criteria are weighted by importance to the consumer — factors such as customer reviews and affordability influence the score more than availability and third-party ratings. With the IQ Score, Insurify is able to provide quantitative ratings for drivers to better compare car insurance companies and make informed decisions to meet their coverage needs.
Find Car Insurance with a $500 Deductible
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Best car insurance with a $500 deductible
Finding the best auto insurer with the cheapest $500 deductible policy depends on your specific coverage needs and financial situation. You should explore your options thoroughly before selecting a policy, carefully considering each company’s advantages and disadvantages.
Nationwide, Dairyland, and Progressive provide the cheapest average policies with a $500 deductible, based on Insurify data.
A major insurer operating since 1926, Nationwide offers several different lines of insurance, including auto, homeowners, and renters. The company earned a customer satisfaction score of 868 out of 1,000 in the J.D. Power 2022 U.S. Auto Claims Satisfaction Study and an A+ (Superior) financial strength rating from A.M. Best.[2]
Nationwide customers can qualify for savings through usage-based programs and a variety of discounts — including multi-policy, defensive driver, and safe driver discounts.
Pros
Offers a range of coverage options
Vanishing deductible feature can decrease your deductible by $100 per violation-free year (up to $500)
Accident forgiveness program keeps your premium from increasing after your first minor violation or at-fault accident
Cons
Doesn’t offer coverage in all states
Eligibility for some discounts varies by state
Some online reviews criticize the company’s customer service
In business since 1953, Dairyland insures cars, motorcycles, and off-road vehicles. The company earned an A+ (Superior) rating from A.M. Best and an A+ rating from the Better Business Bureau.
The company sells nonstandard insurance and offers discounts for insuring multiple cars, having homeowners insurance, getting a quote ahead of time, paying more frequently than required, and more.
Pros
Earned largely positive customer reviews on Trustpilot, with 4.5 out of 5 stars
Customers can choose from several different payment terms
Doesn’t charge a fee for SR-22 certificates
Cons
Significantly higher-than-average number of customer complaints on the National Association of Insurance Commissioners (NAIC) complaint index
Doesn’t offer coverage in all states
Some users report difficulties with the company’s mobile app
Progressive was founded in 1937 and offers a wide range of insurance products, including policies for cars, motorcycles, boats, snowmobiles, golf carts, and other vehicles. A.M. Best gave Progressive an A+ (Superior) financial strength rating. And Progressive received a lower-than-average number of customer complaints on the NAIC complaint index.
Progressive provides several ways for drivers to save on premiums, including discounts for bundling policies, owning your home, getting a quote online, going paperless, and paying the full premium up front.
Pros
Deductible Savings Bank coverage lets you decrease your deductible by $50 for each six-month term you don’t have an accident or violation
Snapshot telematics program calculates rates based on driving behavior
You can set a budget and view coverage choices available at that price on the company website
Cons
Lower-than-average number of customer complaints based on NAIC data
Multi-policy discount not available in every state
Accident forgiveness not available in every state
Methodology
Data scientists at Insurify analyzed more than 40 million real-time auto insurance rates from our partner providers across the United States to compile the car insurance quotes, statistics, and data visualizations displayed on this page. The car insurance data includes coverage analysis and details on drivers’ vehicles, driving records, and demographic information. Quotes for Allstate, Farmers, GEICO, State Farm, and USAA are estimates based on Quadrant Information Services’ database of auto insurance rates. With this information, Insurify is able to offer drivers insight into how companies price their car insurance premiums.
$500 deductible vs. $1,000 deductible: Which is better?
You should consider selecting a $1,000 deductible rather than a $500 deductible if you have a sufficient amount of money set aside in an emergency fund. Choosing the higher deductible saves you money on car insurance premiums, but you’ll have to pay up to $1,000 if you experienced a covered loss or damages.
“I always recommend the highest that you are willing to pay [for your deductible], because it does help get the premium down a little bit,” says Coughlin. If an unexpected $1,000 bill would cause financial hardship for you, then you should start with a $500 deductible, even though you’ll pay slightly higher premiums.
With a $500 deductible, you won’t have to pay more than $500 before your insurance coverage kicks in after you file a claim.
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Other ways to lower car insurance costs
You have other ways to lower your premium besides increasing your deductible. If you prefer a low deductible or have already chosen the highest deductible you can afford, you can try the following strategies to keep your car insurance costs low:
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 higher premiums down the line, so you may want to pay out of pocket for minor dings or scratches. “Even if it’s not really your fault or it’s a little amount that the company’s paying out, it’s always something that the company keeps an eye on,” Coughlin says.
Improve your credit score. 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.[3]
$500 car insurance deductible FAQs
You have lots of things to think about when choosing an auto 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.
If you have a $500 deductible, can you change it to a different amount?
You can change your deductible by calling your agent or insurance company and asking for a new deductible. If you raise your deductible in the middle of your policy term, you should get part of your premium back in a refund or credit for the amount of time left in the term.
Is it better to have a lower car insurance deductible?
A lower car 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. You should get a deductible that you can comfortably pay out of pocket.
Can you get car insurance with no deductible?
You may find car insurance with no deductible, but it usually only applies for policies that don’t protect you in case of property damage. If you lease or finance your car, your lender will typically require you to buy additional coverage that has a deductible.
How often can you change your car insurance deductible?
Companies typically don’t dictate a specific limit for how often you can change your deductible, but they may not want you to make frequent changes because adjusting it requires insurers to do some extra paperwork.
If you try to raise or lower your deductible many times within a policy term, the insurer might question why you need to change it again.
Which company has the cheapest full-coverage $500 deductible?
Sarah Brodsky is a freelance writer with 15 years of experience covering personal finance and economics. She enjoys delving into the details of insurance, credit, loans, and the labor market. She’s written for publications including Bankrate, CNET, and Investopedia, and she’s created content for brands like Credit Karma, KeyBank, and Thrivent. When she’s not writing, you might find her learning languages or baking pizza. She has an AB in economics from the University of Chicago, and she lives in St. Louis, MO. Connect with her on LinkedIn.
