What is deductible in auto insurance

After you pay the car deductible amount, your insurer will cover the remaining cost to repair or replace your vehicle. Comprehensive and collision are the two most common car insurance coverages that include deductibles. Auto insurance deductibles work exactly the same for all coverage types. Here's a quick overview of how deductibles work and how they influence your insurance rate:. In the simplest of definitions, an auto insurance deductible is what you pay out of pocket on a claim.

Copyright [ - ] Progressive Casualty Ins. All Rights Reserved. As you can see in the example, after you pay your deductible amount your insurer may cover the remaining cost to repair or replace your vehicle. This assumes the damage is covered and the claim for the damage is approved. With a higher deductible you'll pay more out of pocket, but your car insurance rate will be lower.

Coverages that could have a car insurance deductible include: comprehensive, collision, uninsured and under-insured motorist property damage, and personal injury protection if it applies in your state. Some insurers even offer a disappearing deductible program. It's what it sounds like. If you go a set amount of time without a claim or violation your deductible amount will decrease or be waived.

Let us help you choose a deductible amount! We offer insurance by phone, online, and through independent agents. Prices vary based on how you buy. If your auto insurance deductible is higher than the cost of the damage to your vehicle, you'll pay for the entire cost out of pocket as the insurer only covers damages above your deductible amount.

In these cases, you may not need to file a claim. You'll pay for all the repairs out of pocket because the cost is lower than your deductible amount.

In most cases, you can choose whether you want to pay a higher or lower deductible for car insurance. Ultimately, it comes down to what you prefer:.

Choose an auto deductible amount you're comfortable with, and make sure you can afford to pay your deductible out of pocket in the event of a claim. It's also important to consider your driving history and the likelihood of filing a claim.

You may opt for a higher car insurance deductible because you're betting against having an accident, but if you've had accidents in the past and often drive on busier roads, you may be more likely to file a claim and pay a deductible.

If you live in a state where cracked windshields are common, you may want to choose a low car insurance deductible for windshield replacements. Premium amounts are hypothetical. Additionally, a lower value car will have a lower cost of insurance. People who are leasing or financing their car tend to choose a lower deductible. This provides better coverage in the case of a claim. Plus, comprehensive is usually a cheaper coverage policy. You would offset the raised comprehensive premium cost by holding a higher deductible for collision insurance.

Collision policies cover those costs if your vehicle hits a car or other car. Nevertheless, to keep it simple, you may want to hold the same deductible for all types of coverage and cars. There are other ways to lower your premiums, like shopping around and bundling your auto and home insurance. Click here to learn about the 16 ways to lower your auto insurance premium. You can start comparing auto quotes right now online, then speak with one of our insurance advisors over the phone at to determine the deductible-premium relationship for your auto insurance.

Or are you okay with paying more out of pocket when filing a claim? If you do decide to go with a high deductible, it would be in your best interest to tuck away some savings each month in case you end up having to pay for damages out of pocket. Invalid ZIP Code. ZIP Code. More Topics. Understanding Auto Insurance Deductibles Your auto insurance provides peace of mind that your insurance company will step in and help you recover if an unexpected event occurs. What Is a Car Insurance Deductible?

Narrator: Let's talk about deductibles. What are they and why do they matter? On screen: What is a deductible? On screen: Your deductible is an up-front out-of-pocket payment Narrator: The dollar amount of your deductible varies, based on the policy you and your American Family Insurance agent select together.

On screen: Premium Deductible Narrator: But all deductibles work the same. On screen: Once your deductible is paid, your insurance kicks in Deductible Out-of-pocket Narrator: And then any covered costs above and beyond that are reimbursed by your insurance.

On screen: Once your deductible is paid, your insurance kicks in Out-of-pocket Additional costs Narrator: Accidents happen. If you would not be able to recoup the cost of your deductible within three years of a claim with the lower premium, consider choosing a lower deductible policy. The age and condition of your vehicle also play a role in the deductible decision. Unless you can save significantly on your premium cost with a higher deductible, it usually makes sense to go low if you do not drive a new-model car.

If you do choose a high deductible, make sure you have money in the bank set aside because a claim can happen at any time. Your insurance company will not reduce or waive the cost of your deductible.

They will write a check directly to your mechanic less the deductible cost. If you do not pay the remainder of the balance, the mechanic can legally keep your vehicle although some businesses might agree to set up a payment plan with you.

You cannot ask your mechanic to overcharge the insurance company to make up the deductible cost, a practice that constitutes insurance fraud. In a situation where you do not have the money to repay your deductible to a mechanic, the insurance company will send you a check for the damage estimate minus the deductible.

However, you would not have sufficient funds to repair the damage to the vehicle, which could significantly lower its value. MoneyGeek lists two main types of auto insurance deductibles.