What is Car Insurance Deductible? Understanding the Basics

If you own a car or planning to buy one, then it is essential to know about car insurance deductible. It’s a term that you might come across while you shop around for car insurance or file a claim. It’s an amount that you agree to pay out of your pocket before your insurer covers the remaining cost of a claim. In simple terms, it’s the amount of money you contribute towards the cost of repairing or replacing your car.

How Does Car Insurance Deductible Work?

Car insurance deductible is a fixed amount you choose when you buy your car insurance policy. It’s the amount that you agree to pay towards a claim before your insurer pays out the remaining amount. The deductible can apply to several incidents, including car accidents, theft, fire, and natural disasters. The higher the deductible amount, the lower your insurance premium will be.

For example, suppose you choose a $500 deductible when you file a claim for $3,000 in damages. You’ll pay $500 out of pocket, and your insurer will pay the remaining $2,500. Similarly, if the damage costs less than your deductible, like $300, you’ll have to bear the entire cost of repairs.

It’s essential to note that your car insurance deductible applies only to the cost of repairing or replacing your car. If you’re responsible for damages or injuries to another driver, their passengers, or their property, then your liability coverage will apply the cost.

Types of Car Insurance Deductibles

When shopping for car insurance, you’ll have to choose the type of deductible you prefer for your policy. Some of the most common types of car insurance deductibles include:

Type of Deductibles
Collision Deductible
It’s the amount you pay towards repairing or replacing your car after an accident.
Comprehensive Deductible
It’s the amount you pay towards repairing or replacing your car after non-collision incidents like theft, fire, or natural disasters.
Uninsured Motorist Deductible
It’s a deductible you pay if you’re in an accident with an uninsured driver, and your insurer pays for your damages.

Factors That Affect Your Car Insurance Deductible

The amount of your car insurance deductible depends on several factors. These include:

Insurance Company: Different insurers offer different deductible options. Some might offer a low and standard deductible while others offer a high deductible with lower premiums.

Coverage Type: The type of coverage you choose can affect your deductible. Comprehensive coverage typically has a lower deductible than collision coverage.

Car Value: The value of your car can affect the deductible amount. The higher the value of your car, the higher the deductible amount will be.

Driving Record: Your driving history can affect your deductible amount. If you have a history of accidents or violations, your deductible may be higher.

FAQs About Car Insurance Deductibles

Here are some frequently asked questions about car insurance deductible:

1. What if I can’t afford to pay my deductible?

Unfortunately, you’re responsible for paying the deductible amount before your insurer covers the rest. If you can’t afford to pay the deductible, you might have to set up a payment plan with your insurer or seek financial assistance.

2. Can I change my deductible?

Yes, you can change your deductible amount at any time. But remember, changing your deductible can affect your premium cost. If you choose a higher deductible, your premium will be lower, but you’ll have to pay more out of your pocket if you file a claim.

3. Does my deductible apply to all types of claims?

No, your deductible applies only to claims related to your car’s physical damage or theft. Liability coverage doesn’t have a deductible.

4. How can I save on my car insurance deductible?

You can save on your car insurance deductible by choosing a higher deductible amount. But remember, if you file a claim, you’ll have to pay more out of your pocket. You can also qualify for a deductible waiver under certain circumstances, like if you’re in an accident with an uninsured driver.


In conclusion, car insurance deductible is a crucial aspect of your car insurance policy. It’s the amount you agree to pay before your insurer covers the rest of the claim. Understanding how deductible works can help you choose the right coverage for your needs and budget.

Remember to choose your deductible amount carefully as it can significantly affect your premium costs and out-of-pocket expenses in case of an accident or theft. Shop around and compare quotes from multiple insurers before making a decision.