A car insurance deductible is the amount you are responsible for paying out of pocket when filing a claim with your insurance company for a covered loss. Your chosen deductible will impact your premium, and choosing one you can afford may be important for ensuring timely repairs in the event of an at-fault incident. Read on to learn more about how deductibles work, when they apply, and how to choose a deductible for your car insurance policy.

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How do car insurance deductibles work?

A car insurance deductible is the amount you agree to pay out of pocket for car repairs or replacement after a covered accident. Keep in mind that a deductible does not apply for minimum coverage policies. If you have full coverage with either comprehensive or collision coverage, or both, your deductible would apply. For example, if you are involved in an accident causing $5,000 of damage to your vehicle, and you have a $500 collision deductible, the insurance company would pay $4,500 of the claim while you are responsible for $500.

Choosing a higher deductible typically lowers your premium, but you will have to pay more in the event of a claim where the deductible applies. You determine your auto insurance deductible amount with your insurance agent or carrier before finalizing your auto insurance policy. However, you should have the option to change your deductible at any time.

What types of car insurance deductibles are there?

Your auto insurance policy is a package of different coverage types. Some coverage types, like liability, may pay the other party for injuries and damages if you cause an accident. Other coverage types — such as comprehensive, collision, personal injury protection and uninsured motorist property damage — exist to help cover injuries to those in your vehicle and damage to your car. These coverages may have deductibles, or at least the option to include a deductible to reduce the cost of coverage.

Here are a few coverage types that usually have a deductible or the option to choose one:


Collision coverage pays for damage to your vehicle resulting from an at-fault collision with an object, like a telephone pole, mailbox or other vehicle. While collision coverage typically will not reimburse you for mechanical failure or normal wear-and-tear on your car, it would cover damage from potholes or from rolling your vehicle. If you file a claim for damage to your vehicle under collision coverage, the collision deductible on your policy will apply.

Collision deductible options typically range from $0 to $2,500. In some cases, you will have the option to choose your own deductible amount within a certain range of values. If you choose not to add collision coverage to your policy, you may avoid a higher premium, but you will be responsible for paying for damage to your vehicle if it is damaged in a collision where you are at fault.


Comprehensive coverage provides protection against theft and damage to your vehicle caused by an incident other than a collision. This includes fire, flood, vandalism, hail, falling rocks or trees and other hazards, such as hitting an animal. A comprehensive deductible is the amount you agree to pay to repair or replace your vehicle if you file a claim under your comprehensive coverage. If the repair costs are less than your comprehensive deductible, you would pay for the repairs yourself.

While there are many instances in which a deductible may apply, there are some scenarios where your comprehensive deductible does not apply. For example, if you have a chip or crack in your windshield and live in Florida, Kentucky or South Carolina, your insurer would repair the damage with no deductible. Some insurers offer zero-deductible comprehensive coverage, which means you would not pay anything if you filed a claim for any comprehensive damage, but your premium would be higher.

Uninsured/underinsured motorist

Uninsured or underinsured motorist property damage coverage provides coverage in the case of damage to your vehicle caused by an uninsured or underinsured driver. You may also be able to make a claim under this coverage in the case of a hit-and-run. Uninsured and underinsured motorist coverage is optional in most states, but it may have a state-mandated deductible amount in those where it is.

Personal injury protection

Depending on your state, you may have personal injury protection (PIP) coverage on your policy. This coverage may help pay for medical expenses for you and all passengers in your vehicle. It may also help cover expenses related to lost wages or household responsibilities after an accident. You may have a deductible that applies if filing a claim under this coverage. Many states with PIP deductibles provide several options to choose from, and the deductible you choose can impact your premium.

What car insurance coverage types do not require a deductible?

Liability coverage is required in most states and helps cover injuries and property damage for the other party or parties if you are at fault in an accident. When you buy liability coverage, you will choose a specific amount of coverage. These coverage limits are the maximum amount the insurance company will pay the other party for a covered claim. As liability coverage is designed to cover the other party’s injuries and vehicle repairs, there is no deductible.

If you choose optional coverage types like roadside assistance or rental car reimbursement, there is generally no deductible, though there may be coverage limits and caps on the amount of claims you can file for these add-ons.

What is the average car insurance deductible?

The average annual cost of car insurance for a full coverage policy with a $500 deductible for comprehensive and collision is $2,014 per year. Many drivers carry policies with $500 comprehensive and collision deductibles, but there are plenty of other deductible amounts available. The deductible options available to you will typically depend on the auto insurance company and policy you’re considering.

It’s also worth noting that your comprehensive and collision deductibles do not have to match, and it is quite common to have one deductible that’s higher than the other. If you increase your deductible amount, it could save you money on your premium. However, deductibles for different coverage types may not be weighed equally by your insurer. Increasing one deductible while decreasing another could still result in a premium increase. For specifics, you can contact your insurance agent.

How should I choose my car insurance deductible?

With so many choices in deductible levels available, you may be wondering how to choose the right one. It may be helpful to consider the following as you shopping for a car insurance policy:

Do you want to pay less for car insurance or repairs?

A higher deductible will generally lower your insurance premium, but you will pay higher out-of-pocket costs if you file a claim for damage to your vehicle. Some claims may even be below your deductible amount, and you might have to pay the entire amount out of pocket. For example, if you back into a tree and do $350 worth of damage to your vehicle and your collision deductible is $1,000, you will pay out of pocket for all the repairs.

If you opt for a lower deductible, your car insurance rate will likely be higher, but you would have lower out-of-pocket costs if you file a claim. If your deductible is $100 and you cause that $350 damage by backing into a tree, you would only have to pay your $100 deductible, while your insurance would pay the other $250. However, you could spend more on your premium by having a lower deductible and never end up filing a claim. This is the nature of having insurance coverage and an example of the risk both you and the insurer take on.

How much can you afford to pay out of pocket?

Before you choose a deductible, most insurance professionals recommend you figure out what you can afford to pay if your car is damaged in an accident. If your budget allows for a maximum out-of-pocket expense of $500, you probably should not choose a deductible higher than $500. If you do, you may not be able to afford to fix your vehicle if you need to pay the deductible for repairs.

Does your lender have deductible requirements?

If your vehicle is financed or leased, your lender will likely require you to carry comprehensive and collision coverage for your vehicle. If that is the case, you will need to choose deductibles for each. Some lenders will have a maximum deductible that you are allowed to carry for comprehensive and collision. It is important to check with the financial institution that handles your loan or lease to determine if these restrictions exist.

When are you not required to pay your car insurance deductible?

There will be occasions when you are not required to pay your deductible. In general, you will typically not be required to pay your deductible when:

Another driver is at fault

If another driver is deemed at fault in an incident, and they are insured, you should not be responsible for paying a deductible on the claim that you file through their insurance company. Your deductibles only apply when filing a claim with your insurer.

You have a diminishing deductible

Some insurance companies offer a diminishing deductible or vanishing deductible option that could decrease or eliminate your deductible. This policy feature may reduce your deductible over time if you remain accident- and violation-free. For instance, your company may reward you with $100 off your deductible for each accident-free year. So, for example, if you have a $500 collision deductible and you do not have an accident or violation for four years, if you needed to file a claim, your deductible would be $100 instead of the original $500. Once you use your diminishing deductible, there is usually a time period to qualify for it again. This feature is not available from every carrier.

Frequently asked questions

    • There are a few different coverage types on your policy that could kick in if you are deemed at fault for an accident where you hit another car. Your bodily injury liability and property damage liability would pay for the damages to the other party and their vehicle, and those coverage types do not have a deductible. However, if you have collision coverage and want the insurance company to step in to cover the repairs to your vehicle, you would have to pay your collision deductible.
    • This depends on the circumstances. If the accident was the other driver’s fault, their liability coverage should pay for your damages, and you should not have to pay a deductible. However, if the other driver is uninsured or underinsured, you may be responsible for paying a deductible depending on how your coverage applies to cover the expenses. If you are hit by another driver whose insurance company denies the claim, or if you are involved in a complicated claim that is taking a long time to be settled, you could use your collision coverage to pay for your damages. Your insurance company would pay for your damages, minus your deductible, and then ask the at-fault driver’s insurer to pay the money back in a process called subrogation.
    • Most insurance professionals recommend choosing a deductible you can comfortably afford to pay. If you want a lower premium, you could consider a higher deductible if you can afford it. However, if a $1,000 deductible is not feasible, it may make sense to take the lower deductible and pay a higher premium. When choosing a deductible, you might also consider the value of your car. For example, if your car is only worth $1,500, setting a $1,000 deductible means your insurance company may only be responsible for up to $500 in damages to the vehicle.
    • If you file a covered claim under a coverage type with a deductible, you may have to pay the deductible prior to work beginning on your damaged vehicle or before you can pick up the car once repaired. Most car insurance companies require you to pay the deductible to the repair shop, while the insurer would pay the balance minus your deductible. This is why most insurance professionals recommend choosing a deductible you can comfortably afford to pay in the event of a claim.