Car Insurance Deductibles: How to Choose Between $500, $1,000 and More

What a deductible is and where it applies

A deductible is your share of a covered claim. If your collision deductible is $500 and the repair costs $3,000, you pay the first $500 and the insurer pays the rest. For a total loss, the insurer pays the car's actual cash value minus your deductible.

• Collision and comprehensive almost always have deductibles, and you can usually choose a different amount for each.
• Liability coverage has no deductible for you. It pays others for damage you cause.
• PIP, uninsured motorist property damage and glass coverages may have their own deductibles, depending on your state and policy.
• Deductibles usually apply per claim, so two separate incidents mean two deductibles.

How the deductible affects your premium

Raising your deductible shifts more of the small-claim risk to you, so the insurer charges less. The size of the savings varies by insurer, state, car and driver. Savings tend to be larger in dollar terms on newer or more expensive cars, where collision and comprehensive make up a bigger share of the premium, and smaller on older cars.

The only way to know your savings is to ask for quotes at several deductible levels. The deductible vs. premium calculator lets you compare scenarios side by side.

$500 vs. $1,000: a simple break-even test

Moving from a $500 to a $1,000 deductible means you'd pay up to $500 more if you file a claim. To judge whether that's worth it:

1. Get the yearly premium at both deductible levels and subtract to find your yearly savings.
2. Divide the extra risk ($500) by that yearly savings. The result is the number of claim-free years it takes for the savings to cover the higher deductible once.
3. Compare that number with how often you've filed collision or comprehensive claims in the past.

The same test works for $1,000 vs. $1,500 or any other pair of options.

How to choose your deductible

• Emergency savings. Pick an amount you could pay tomorrow without borrowing or skipping bills.
• Lender limits. If the car is financed or leased, the contract usually sets a maximum deductible. See insurance for leased and financed cars.
• Claim likelihood. Long commutes, city parking, teen drivers or hail-prone areas make claims more likely, which favors a lower deductible.
• Car value. On an older car, a high deductible can wipe out most of what a claim would pay. At that point, consider whether you need the coverage at all; see full coverage vs. liability.
• Different deductibles for each coverage. Some drivers keep a lower comprehensive deductible (for theft, hail or animal strikes they can't control) and a higher collision deductible.

Do you pay a deductible if you're not at fault?

• Claim against the other driver's insurer: no deductible. Their property damage liability pays for your repairs.
• Claim under your own collision coverage: you pay your deductible first. If the other driver was at fault, your insurer may recover its payment and your deductible from the other insurer through subrogation, and refund you.
• Uninsured driver: uninsured motorist property damage coverage, where available, may have its own deductible, which is sometimes waived when you can identify the at-fault driver. Rules vary by state.

Glass and zero-deductible rules

Windshield damage from a rock or debris is usually a comprehensive claim. A few states have laws that waive the comprehensive deductible for glass:

• Florida law says the comprehensive deductible does not apply to windshield damage.
• Kentucky law requires full coverage for motor vehicle glass claims under comprehensive, without a deductible.
• South Carolina has long required a zero deductible for safety glass, though lawmakers there have considered changing it to an optional coverage with a small deductible.

In other states, many insurers sell optional full glass coverage that removes or lowers the deductible for glass repairs. Because these laws can change, confirm the current rule with your state Department of Insurance.

How the deductible works in a claim: two examples

These hypothetical examples show the math. Your actual claim depends on your policy, the repair estimate and the car's value.

If you owe more on a loan than the $8,000 payout in the second example, you would still owe the difference unless you have gap coverage.

Other deductible details worth knowing

• Disappearing or vanishing deductibles. Some insurers reduce your deductible for each claim-free year. Compare the cost of the feature with its value.
• Deductible for a total loss. Your deductible is subtracted from the actual cash value payout, so it matters even when the car can't be repaired.
• Small claims. If damage is only slightly above your deductible, some drivers pay out of pocket to avoid a claim on their record. At-fault claims can raise premiums at renewal.
• Payment to the shop. You typically pay your deductible to the repair shop, and the insurer pays the shop the rest.

Use the premium estimator to see how deductible choices change a rough estimate, and read comprehensive vs. collision to understand which deductible applies to which claim.

Related guides

• Comprehensive vs. Collision: What Each Covers and What They Don't
• Full Coverage vs. Liability Only: What Each Means and When to Switch
• Car Insurance for Leased and Financed Cars: What Lenders Require
• What Happens After a Car Accident: Claims, Rate Increases and When People Call a Lawyer
• How to Read a Car Insurance Quote and Compare Offers Apples to Apples