Understanding your auto insurance deductible

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You might think of your car insurance as just another bill to pay, but it’s actually an essential part of your financial planning. Auto insurance can protect you from financial devastation if you cause an accident. Full coverage, which adds both comprehensive and collision coverage to your policy, can also help protect you from repair and replacement costs if your car is damaged. If you have a loan or lease on your vehicle, you’re likely required to carry full coverage, but you might want to consider it even if you own your car outright.

When you purchase full coverage, you’ll need to select a deductible for both your comprehensive and collision. Your car insurance deductibles are the amount you will pay out of pocket if you file a claim for damage to your vehicle. In insurance terms, your deductible is the amount of risk you are willing to assume. The average cost for full coverage car insurance with $500 comprehensive and collision deductibles is $1,674 per year. Understanding auto insurance deductibles could help you better decide what amounts to choose for your policy.

Bankrate Insight
  • Your deductible levels affect your premium, but the change generally isn’t significant.
  • Because comprehensive claims tend to be less expensive than collisions, most insurance agents recommend a lower comprehensive deductible and a higher collision deductible.
  • You want to consider your financial situation and your car’s value when choosing deductibles.

How do auto insurance deductibles work?

Full coverage includes comprehensive and collision, which cover damage to your vehicle. Collision coverage pays for damages caused by colliding with another vehicle, an object or a person. Comprehensive pays for other forms of damage, like theft, vandalism, weather-related damage, fire and hitting an animal. Unlike liability coverage, both collision and comprehensive coverage have deductibles, which is the amount of a claim you agree to pay out of pocket. While you can choose the same deductible for both, they are independent of each other. For example, you could have a $100 comprehensive deductible and a $500 collision deductible.

Imagine your car is parked outside when a hailstorm hits. Your car sustains $1,000 in damage and you have a $100 comprehensive deductible. Your auto insurance company will pay $900 of the claim and you will pay your $100 deductible. If you rear-end another vehicle, your liability coverage will pay for the other party’s damages and injuries, while your collision coverage will pay for the damages to your car. If you have a $2,500 repair bill and a $500 collision deductible, you’ll get a claim payout check of $2,000. Although commonly misinterpreted, your deductible is subtracted from your claim payout; you do not need to pay your deductible before your insurance company will issue a check.

Both collision and comprehensive coverage pay without regard to fault. You can use your full coverage to fix your vehicle whether you caused an accident or another party did.

How do car insurance deductibles impact premiums?

Bankrate’s study of deductible levels in over 35,000 ZIP codes nationwide confirmed that, generally, the higher your deductible, the lower your premium. Because you are willing to pay more in the event of a claim, insurance companies charge you less, though what may be surprising is that the difference is not always significant. Keep in mind, too, that our study focused on drivers with clean driving records. If you have an accident or ticket surcharging on your policy, you may see bigger savings by increasing your deductibles. While your deductible level can be a tool to help you control your insurance premiums, it isn’t always the most effective way to save on your car insurance.

You may be tempted to choose high deductibles to save on your premium, but you should always consider how easily you’ll be able to pay the amount after a claim. If you choose a $1,000 collision deductible, but might struggle to pay $1,000 out of pocket if you damage your car, a lower deductible might make more sense. It may also be worth considering that you may be more tempted to file claims if you have lower deductibles, which can raise your rates over time.

The deductible levels you choose will depend heavily on your financial circumstances. If you can afford to pay a higher amount out of pocket, you may choose higher deductibles to lower your insurance costs. But if you would struggle to pay your deductibles, that can be a good sign that you need to choose a lower option, even though it can mean slightly higher premiums.

Average full coverage premium by deductible amount

Comprehensive/collision deductible ($ amount) Average annual full coverage premium Annual premium impact
100/500 $1,806 +$132
250/500 $1,725 +$51
500/500 $1,674 $0
500/1,000 $1,523 -$151
1,000/1,000 $1,459 -$215

*Premium impact is adjusting deductibles from $500 comprehensive and collision deductible amounts

Small changes to your deductible levels — like changing from a $250 comprehensive deductible to a $500 comprehensive deductible — only moderately change your premium. However, larger changes can have a bigger impact. If you have a $100 comprehensive deductible and a $500 collision deductible, increasing to $1,000 for both could save you nearly $350 per year, on average.

What to consider when choosing your deductibles

Picking appropriate deductible levels is an important step in purchasing full coverage. If you choose levels that are too high, you may not be able to afford your deductibles, which means you won’t be able to finalize the claims process. But a deductible that is too low might mean paying more premium than you want to.

Typically, insurance agents recommend that your comprehensive deductible be between $100 and $500. Comprehensive claims tend to be filed for less damage than collisions, so having a lower deductible is often logical. Collision deductibles can sometimes go as low as $100 or $250, but most agents recommend that you start at $500 and increase if you can afford to.

When you are choosing your deductible, you might want to consider:

  • The actual cash value of your vehicle: The value of your vehicle could help you decide on deductible levels. If your car is only worth $2,000, a $1,000 deductible would cover half the insurance payment. As your vehicle gets older, you may want to consider adjusting your deductibles down to account for the lower value.
  • Your monthly or yearly budget: Because your deductibles affect your premium, your budget may play a role in determining the amounts you choose. For example, if you do not have money on reserve, a lower deductible could make sense. That way, you will pay a little more each month instead of having a higher deductible if you file a claim. If you have enough savings to be comfortable paying more out of pocket during a claim, you could opt for a higher deductible to save on your premiums.
  • Deductible add-ons: There are optional deductible programs that you might be able to take advantage of. A vanishing deductible is a common option offered by auto insurers. This program will typically lower your deductibles by a set amount for each year that you don’t have a claim, although specifics vary by company. You may also have the option to choose “full glass,” which means that, regardless of your comprehensive deductible, you’ll pay nothing if the only damage to your car is to the glass. This can be helpful if you drive often and risk cracked or broken windshields and windows from roadway debris.

It may seem tricky to choose an appropriate deductible level. However, a bit of reflection into your financial situation, researching your car’s value and requesting quotes with various deductible choices could help you make a decision you feel comfortable with. Talking with a licensed agent can also be helpful. An agent can review your circumstances and help you choose deductible levels that suit your needs.


Bankrate utilizes Quadrant Information Services to analyze 2021 rates for all ZIP codes and carriers in all 50 states and Washington, D.C. Quoted rates are based on a 40-year-old male and female driver with a clean driving record, good credit and the following full coverage limits:

  • $100,000 bodily injury liability per person
  • $300,000 bodily injury liability per accident
  • $50,000 property damage liability per accident
  • $100,000 uninsured motorist bodily injury per person
  • $300,000 uninsured motorist bodily injury per accident

Collision deductible: Rates were calculated by evaluating our base profile with the following deductible amounts applied: 500 and 1,000.

Comprehensive deductible: Rates were calculated by evaluating our base profile with the following deductible amounts applied: 100, 250, 500 and 1,000.

To determine minimum coverage limits, Bankrate used minimum coverage that meets each state’s requirements. Our base profile drivers own a 2019 Toyota Camry, commute five days a week and drive 12,000 miles annually.

These are sample rates and should only be used for comparative purposes.

Written by
Cate Deventer
Insurance Writer & Editor
Cate Deventer is a writer, editor and insurance professional with over a decade of experience in the insurance industry as a licensed insurance agent.
Edited by
Insurance Editor