High-Deductible Car Insurance (2024)

High-deductible car insurance isn’t for everyone, but here are the situations in which it might make sense for you.

Anna Baluch
Written byAnna Baluch
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Anna BaluchInsurance Writer
  • 4+ years writing insurance and personal finance content

  • MBA from Roosevelt University

Anna leverages her personal finance and insurance knowledge to create educational content that helps people make smart financial decisions.

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Courtney Mikulski
Courtney MikulskiSenior Editor, Auto
  • 3+ years producing insurance and personal finance content

  • Main architect of the Insurify Quality Score

Courtney’s deep personal finance knowledge extends beyond insurance to credit cards, consumer lending, and banking. She thrives on creating actionable content.

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Konstantin Halachev
Data reviewed byKonstantin Halachev
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Konstantin HalachevVice President of Engineering
  • 7+ years experience in data analysis

  • Ph.D. in Computational Biology

Konstantin has led data teams across multiple industries, including insurance, travel, and biology. He’s led Insurify’s engineering team for more than three years.

Updated May 23, 2024

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Drivers using Insurify have found quotes as cheap as $35/mo for liability only and $45/mo for full coverage.

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Rates shown are real-time Insurify user quotes from 100+ insurance companies and Quadrant Information Services data. Insurify’s algorithm excludes anomalous quotes and anonymizes personal details, then displays refined quotes by price, date, and insurer popularity up to 10 days ago from May 23, 2024. Actual quotes may vary based on the policy buyer’s unique driver profile.

*Quotes generated for Insurify users within the last 10 days. Last updated on May 23, 2024

Rates shown are real-time Insurify user quotes from 100+ insurance companies and Quadrant Information Services data. Insurify’s algorithm excludes anomalous quotes and anonymizes personal details, then displays refined quotes by price, date, and insurer popularity up to 10 days ago from May 23, 2024. Actual quotes may vary based on the policy buyer’s unique driver profile.

Your deductible affects what you pay in car insurance premiums. If your goal is to keep your monthly payments as low as possible, you may choose a high-deductible plan. After all, you’re a careful driver, and it’s unlikely that you’ll ever have to file a claim.

The truth is that accidents do happen, often when you least expect them. If you do get in an accident with a high-deductible car insurance plan, you’ll have to come up with a lot of money up front. So, before you commit to a high-deductible policy, consult an insurance agent or use Insurify’s car insurance comparison tool to shop around and explore different car insurance quotes.

Quick Facts
  • Once you pay your collision or comprehensive deductibles, your car insurance company will cover the rest of your claim for a covered event, up to your policy limits.

  • A high-deductible auto insurance plan can result in a lower monthly premium.

  • Liability coverage never has a deductible.

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What is a car insurance deductible?

An auto insurance deductible is the amount you have to pay out of pocket before your car insurance coverage kicks in and covers the remaining amount up to your policy limits.[1]

Let’s say you have a collision policy with a $500 deductible. If you hit another vehicle or stationary object, collision coverage will pay for the damage after you pay $500. As a driver, it’s your responsibility to choose the car insurance plan and deductible for your unique situation.

Standard deductible vs. high-deductible car insurance

How much you set for a deductible on your policy affects your car insurance premiums. The most common deductible amount is $500, but your options can vary among car insurance companies.

High deductibles are usually around $1,000 to $2,000, but choosing a comprehensive or collision deductible this expensive can help lower your car insurance premiums. Generally, the lower your deductible, the higher your auto insurance rates, and vice versa. If you want to pay less out of pocket when you file a claim, choose a deductible of $500 or less. If you want to pay lower monthly, quarterly, or annual car insurance premiums, then choose a high deductible of $1,000 or more.

Vanishing deductibles

Some insurance companies offer vanishing deductibles — also called disappearing deductibles — which are programs that reduce your collision or comprehensive deductible every policy term you go without filing a claim. For example, if you start with a $500 deductible and your auto insurer reduces it by $100 for every year you don’t file a claim, your deductible will be $300 after two claim-free years.

Insurance companies typically limit how much your deductible can decrease, but some auto insurers will let your deductible go to $0 under a vanishing deductible program.

Best Car Insurance Companies

Best Car Insurance Companies

How deductibles work

If you have a car insurance policy with a deductible and get into an accident, you’ll need to file a claim with your auto insurance company. Upon approval, you won’t have to send your car insurance company a check in the mail or give it your credit card number.

Instead, either your insurer will subtract your deductible amount from the approved payout of your claim, or you’ll pay the repair shop your deductible amount and your insurance company will cover the remainder.

For Example

Let’s say car repairs after an approved claim cost $8,000 and your deductible is $1,000. Your auto insurance company will issue you a check for $7,000, or you’ll pay the repair shop $1,000 and your insurer covers the rest.

When you’ll need to pay a deductible

If you have collision or comprehensive coverage on your auto policy, they’ll likely have two separate deductibles that you have to pay each time you file a claim.[1] You’ll pay a deductible for comprehensive, collision, and sometimes glass coverage claims.

For example, imagine you need to file a comprehensive coverage claim because a windstorm caused tree branches to fall on and dent your vehicle. You’ll pay your deductible to the repair shop you took your car to, or your insurance company will deduct it from your payout.

In the case of an at-fault accident, your liability coverage pays for the other parties’ injuries and damages, and you’ll never pay a deductible for that.

High-deductible car insurance pros and cons

Before increasing your deductible, check out the advantages and disadvantages of a high deductible.

Pros
  • Lower premiums: Generally, the higher your deductible, the less you pay for car insurance.

  • May never need to pay: If you never file a claim, then you may never have to worry about paying a high deductible.

Cons
  • Higher out-of-pocket costs: You’ll have to pay more out of pocket if you file a claim.

  • More financial responsibility: If car repairs cost $1,500 and your deductible is $1,000, you’re paying the majority of the cost before insurance kicks in.

See Also: Best and Worst Sites to Compare Car Insurance

See Also: Best and Worst Sites to Compare Car Insurance

Who should consider high-deductible car insurance?

High-deductible car insurance isn’t for everyone. If you’ve had frequent past claims or live in a high-risk area where weather damage or theft occurs often, then it’s better to have a cheaper deductible.

However, claims-free drivers who live in areas with mild weather patterns and low car theft rates can consider high-deductible car insurance if they believe their risk of filing a claim is lower. In this case, a high deductible can keep your car insurance premiums cheap and let you put your extra money aside for savings.

How to choose the right deductible for you

When you buy an auto insurance policy, you need to choose deductibles for coverages like collision and comprehensive. Here are some guidelines to help you determine what your deductible should be:

  • Ask yourself if you can afford the deductible. Calculate whether you can comfortably cover the deductible if you file a claim. If you have limited emergency savings, then a cheaper deductible may be the better option.

  • Balance the deductible with the premiums. Do the math and figure out how much you’d save in premium costs with a higher deductible versus a cheaper deductible. The goal is to find a balance between affordable premiums and affordable deductibles.

  • Think about your claims record. If you’ve had previous at-fault accidents or live in an area where many car insurance losses occur, then you should consider a lower deductible.

  • Consider your car’s value. Expensive vehicles may mean more expensive repairs and more expensive premiums. If you can afford a more expensive deductible for a high-value vehicle, it may help reduce your auto insurance premiums.

Learn More: Best Car Insurance with a $500 Deductible

Learn More: Best Car Insurance with a $500 Deductible

Other ways to save on car insurance

If you’re considering a high-deductible car insurance policy, you may be looking for ways to save on insurance. Here are some tips for keeping costs low:

  • illustration card https://a.storyblok.com/f/162273/100x100/9cd41581f2/savings.svg

    Look for discounts

    Plenty of car insurance companies offer long lists of discounts that drivers can qualify for to get cheaper insurance. Discounts like safe driver, good student, continuous coverage, automatic payments, and paperless billing are common among auto insurers.

  • illustration card https://a.storyblok.com/f/162273/100x100/0f53b7e117/credit-card-2-1.svg

    Improve your credit score

    Many states allow insurance companies to look at drivers’ credit histories to determine rates. Check your credit score and take the time to improve it to good or excellent for more favorable auto insurance rates.

  • car in carage

    Bundle policies

    Car insurance companies often offer discounts when you buy an auto insurance policy with another product, like homeowners insurance or renters insurance. If you can, buy your policies from one company for a bundling discount.

  • illustration card https://a.storyblok.com/f/162273/x/fa11c1fe75/comparison-website.svg

    Compare quotes

    One of the best ways to save on car insurance is to compare quotes from multiple insurers at once to find the company that offers you the best rates for the coverage you need. You may have to compare more than three quotes to find it, but you can use a comparison tool like Insurify to help you.

High-deductible car insurance FAQs

Check out Insurify’s guide to car insurance for first-time drivers, and read the answers to common high-deductible car insurance questions below.

  • What’s the average car insurance deductible?

    The most common deductible amount is $500, according to some national car insurance companies. However, you should carefully consider your personal situation and budget when choosing your deductibles because what’s best for someone else may not be the best for you.

  • How do different deductible amounts affect car insurance premiums?

    Raising your deductible from $200 to $500 could decrease your premiums by 15% to 30%, according to the Insurance Information Institute. So if you had a monthly premium of $170 and a $200 deductible, you could potentially take $25 to $51 off your monthly premium by raising your deductible to $500.

    And if you raise your deductible to $1,000, it could save 40% or more, which would be $68 off your monthly premium.[2]

  • What types of car insurance have deductibles?

    Collision and comprehensive coverages typically come with a deductible. Some glass coverages also come with a deductible, but it depends on the policy.

  • Do you pay a deductible when you’re at fault for an accident?

    Yes. If you’re at fault for a car accident, you’ll pay a deductible if you’re tapping your collision, comprehensive, or personal injury protection coverage.

  • How does driving record affect your choice of deductible?

    You should consider your driving record when choosing your deductible. If you have a tendency to back into objects, rear-end other vehicles, or cause accidents, then you might choose a lower deductible. However, if you’re a relatively safe driver and have a clean record, then you can choose a higher deductible because you may not file claims as often, if at all.

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
Full-coverage premium averages correspond to the same bodily injury and property damage limits in addition to:
  • 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.

Sources

  1. III. "Understanding your insurance deductibles."
  2. III. "Nine ways to lower your auto insurance costs."
Anna Baluch
Anna BaluchInsurance Writer

Anna Baluch is a Cleveland-based personal finance and insurance expert. With an MBA from Roosevelt University, she enjoys writing educational content that helps people make smart financial decisions. Her work can be seen across the internet on many publications, including Freedom Debt Relief, Credit Karma, RateGenius, and the Balance. Connect with Anna on LinkedIn.

Courtney Mikulski
Edited byCourtney MikulskiSenior Editor, Auto
Courtney Mikulski
Courtney MikulskiSenior Editor, Auto
  • 3+ years producing insurance and personal finance content

  • Main architect of the Insurify Quality Score

Courtney’s deep personal finance knowledge extends beyond insurance to credit cards, consumer lending, and banking. She thrives on creating actionable content.

Featured in

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Konstantin Halachev
Data reviewed byKonstantin HalachevVice President of Engineering
Headshot of Konstantin Halachev, VP of Engineering at Insurify
Konstantin HalachevVice President of Engineering
  • 7+ years experience in data analysis

  • Ph.D. in Computational Biology

Konstantin has led data teams across multiple industries, including insurance, travel, and biology. He’s led Insurify’s engineering team for more than three years.

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