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No-Deductible Car Insurance: Is it right for you? (Updated August 2022)

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Amy Beardsley

By: Amy Beardsley

Edited by Jackie Cohen

Last Updated June 15, 2022

Why you can trust Insurify

Insurify partners with top insurance companies and is a licensed agent in all 50 states. However, the insurance experts writing our content operate independently of our partners. Check out reviews from over 3,000 satisfied customers, how we make money, our data methodology, and our editorial standards.

Imagine you just had a car accident, and your insurer says you don’t have to pay anything out of pocket. It sounds like a dream, but that convenience can come with a high price tag.

Zero-deductible car insurance exists, but it can be expensive. Most people choose to pay a deductible to keep premiums low. If you’re in the market for coverage, find the lowest car insurance rates with a deductible of your choice. With Insurify, you can compare insurance quotes from the nation’s best insurance companies.

Quick Facts

  • A deductible is an amount paid out of pocket for a claim.
  • Some insurance policies offer coverage with a $0 deductible.
  • Lower-deductible policies generally come at a higher cost.

How Auto Insurance Deductibles Work

Can I select a $0 deductible on my car insurance?

While some insurance policies offer $0 or low deductibles, policy rates are often much higher than those with traditional deductibles.

A deductible is the amount of money a policyholder pays toward a claim before the car insurance company steps in to pay the rest. For example, suppose a rock cracks your windshield while driving, and the replacement cost is $600. If you have a $250 deductible, you only pay that amount. The insurance covers the remaining $350.

You might be familiar with health insurance deductibles. It’s a similar concept, with one significant difference: health insurance deductibles reset annually. Once you meet it, you don’t have to pay the deductible again until the following year.

But car insurance deductibles reset for each claim. If you have a claim for a broken windshield in January and a parking lot fender bender in May, you will pay your deductible twice—once for each claim.

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What is no-deductible car insurance?

No-deductible car insurance is the same type of policy as one with a deductible. The only difference is one requires you to pay an out-of-pocket cost when filing a claim, and the other has the insurance company picking up the entire tab.

The purpose of all insurance is to shift financial risk from you to someone else (the auto insurer, in this case). So buying car insurance with no deductible will cost more. The insurer charges you higher fees to transfer more risk to them.

On the other hand, you accept some risk when choosing to have a deductible. Then, the insurance company charges you less because they aren’t on the hook for the entire bill.

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How does zero-deductible car insurance work?

First, know that not all insurers offer no-deductible car insurance. If you find a provider with a zero-deductible option, the peace of mind you have from not paying out of pocket comes with a bigger price tag.

Typically, drivers choose a deductible amount, such as $250, $500, or $1,000. The higher the deductible, the cheaper the car insurance becomes. The deductible you pick should correspond to how much you can afford to pay if you have an accident.

Suppose you have a good emergency fund and can handle an unexpected car repair bill. You might choose a $1,000 deductible to lower your premiums. But if you can’t afford to pay that much if someone damages your car, a lower deductible is a better option. You might even opt for a no-deductible policy. Just be aware that you’ll pay higher premiums.

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How Deductibles Affect Auto Insurance Cost

Insurance is all about managing financial risk, and deductibles play an essential role. Most insurance companies have several deductible options, and drivers can choose the deductible amount when buying car insurance.

Generally, the lower the deductible, the more car insurance costs. A policy with a $1,000 deductible will cost less than the same policy with a $500 deductible.

When do you pay a deductible?

Not all car insurance claims require you to pay the deductible. The deductible generally applies to:

Comprehensive coverage, which pays for damage to your car due to natural disasters, hitting an animal, falling objects, fire, theft, and vandalism.

Collision coverage pays to repair your car from a collision with an object or another vehicle and single-car accidents like rolling over.

Almost all states require drivers to carry liability insurance to cover medical expenses. Other states can require personal injury protection (PIP), underinsured motorist coverage (UIM), or uninsured motorist coverage (UM). However, you don’t typically pay a deductible if your claim is for liability coverage, PIP, UIM, or UM.]

Is the damage worth filing a claim?

Having a deductible gives car owners the opportunity to decide if filing a claim is worth the effort or if it’s less expensive to pay for the repair themselves without filing a claim. For example, if your claim is something simple like replacing a windshield, it might be easier and cheaper to pay for it yourself rather than filing a claim with the insurance company.

However, suppose a tree fell on your car and caused $6,000 in damage. You may be relieved to pay just $500 and let the insurer pay the remaining $5,500 for repairs.

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Average Cost of Car Insurance Deductibles

The average cost of car insurance deductibles varies by provider and type of insurance. Your insurance agent might give you the option of $250, $500, or $1,000, though the deductible you choose could be higher or lower.

How should you choose a deductible? The best way to decide which is right for you is to review your financial stability and risk tolerance.

  • Do you live paycheck to paycheck? A low-deductible or no-deductible plan might be best because you can’t pay it if you don’t have the money available.
  • Do you have a solid emergency fund? You might opt for a higher deductible to lower your car insurance premiums.

Remember: No matter the amount you choose, you should have enough cash to cover the deductible if you need to file a claim.

Who should consider no-deductible car insurance?

No-deductible car insurance is more expensive than auto insurance policies with a higher deductible. But it’s a good choice for some drivers. It might be a good option if you want to avoid the risk of paying a deductible and don’t mind paying more for car insurance or if you don’t have sufficient savings to pay the deductible if you’re in an accident.

If you prefer a lower premium, you may opt for a different type of coverage with a higher deductible amount.

Alternatives to Zero-Deductible Car Insurance

Not everyone can afford the high cost of a no-deductible policy. Luckily, there are alternatives to consider when shopping for auto insurance coverage.

High-Deductible Policies

Consider a high-deductible policy if you’re comfortable taking on more risk but don’t want to pay the steep price of no-deductible coverage.

Low-Deductible Insurance

A low-deductible car insurance policy may be better if you don’t have enough immediate cash to pay a higher deductible. It’s also a good option if you have a higher chance of experiencing an accident or filing a claim.

Vanishing Deductible

Some insurance companies offer vanishing deductibles. It’s a type of “deductible reduction” available to safe drivers who don’t have a history of filing claims. With a vanishing deductible, the insurer rewards you for maintaining a good driving record and not filing claims by reducing your deductible by $50, $100, or more per year.

For example, suppose you have a $500 deductible. You drive safely for three years but then have an accident. The insurer might only require you to pay $200 instead of the full deductible amount of $500.

Is a no-deductible policy worth it?

A no-deductible policy might be worth it if you don’t have much money saved or don’t mind paying a higher monthly premium for lower risk.

However, you could lower your car insurance bill significantly by switching to a $250 or $500 deductible. Just remember to set aside enough to cover it, just in case.

Frequently Asked Questions

  • Unless you have a no-deductible policy, you may only pay a deductible if you file a collision or comprehensive insurance claim—e.g., if you hit an animal and cause damage to your car or are involved in an accident with another vehicle.

  • No-deductible car insurance means you do not have to pay a deductible when filing a claim. When buying the policy, you typically choose a deductible amount. But no-deductible coverage sets the deductible to $0.

  • The most straightforward way to avoid paying a collision deductible or comprehensive deductible is to set up a no-deductible policy. Other times, you may not have to pay if your policy waives the deductible for circumstances like auto glass repair or if you were not at fault in an accident.

  • Higher deductibles allow you to save money on car insurance premiums. The best way to manage car insurance with a higher deductible is to set aside the funds to cover the deductible in case of an emergency repair or auto insurance claim.

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  • Data scientists at Insurify analyzed over 40 million auto insurance rates 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. With these insights, Insurify is able to offer drivers insight into how their car insurance premiums are priced by companies.

Amy Beardsley
Amy Beardsley
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Insurance 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.

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