Car Insurance Deductibles

Understand your deductible options. We'll help you choose the best one for you.

Car Insurance Deductibles: Pro and Cons


The definition of a deductible can vary based on what type of insurance you are referring to. Even between your home and auto insurance, what defines your deductible varies. For your auto insurance, a deductible is defined as your portion of the financial responsibility for repairs to your vehicle. Although this is a fairly straightforward way to describe your deductible, there are some individual details that can help save you money on your car insurance. Let’s explore.


Car Insurance Deductibles: Ins and Outs
  1. Understanding car insurance deductibles
  2. What’s the cheapest insurance company for a $500 deductible
  3. What’s the cheapest insurance company for a $1,000 deductible
  4. How your car insurance deductibles affect your premium
  5. How to choose your deductible
  6. Where can I buy a car insurance policy with my preferred deductible?




What is a deductible?


A deductible is what you pay after an accident and filing an auto insurance claim — the remainder is covered by your insurance company. Let’s look at an example. Say you back into a fire hydrant and cause $3,000 worth of damage to your vehicle. In order to get the repairs handled through your insurance company you would have to file a collision claim. If you have a $500 deductible and file a claim with your insurance company, your insurer would pay the remaining $2,500.

A deductible, however, is only applicable to specific insurance coverage options. Namely, a deductible doesn’t apply to your liability insurance. The liability coverage of your car insurance covers you for damage you cause to other people or their property. If you are at-fault for an accident, your liability insurance would pay for the bodily injury and property damage up to your policy limit.

As we stated, a deductible most commonly applies to these coverages; your collision, comprehensive, and your uninsured property damage coverage. Let’s explore these coverage options.



Collision Deductible

Your collision coverage is pretty accurately named; it specifies protection from accidents that occur when you collide with something. For example, if you hit a guardrail, a wall, or another vehicle. Unlike your liability coverage, your collision coverage does not factor in fault. Meaning, as long as you have the coverage and the damage occurred from a covered loss, you will receive compensation from your insurance company for your loss. Your collision deductible refers to what you pay.



Comprehensive Deductible

The name “comprehensive” isn’t as descriptive as collision coverage is. Basically, comprehensive insurance coverage is designed to fill in any coverage gaps left by your collision coverage. Meaning, it covers things “other than collision.” Sometimes called OTC, comprehensive coverage handles things like vandalism, theft, weather, and animal-related events. Like your collision coverage, you do not need to be at-fault or not-at-fault to use this coverage. As long as the damage occurs in a way that is covered by your insurance company, you will receive a claim payout (minus your deductible).



Uninsured property damage coverage

Uninsured property damage coverage, or UMPD, closely mirrors your collision coverage. It provides physical coverage to your vehicle if you’re in a not-at-fault accident in which the other driver either does not have insurance, or the limits on his liability coverage are exhausted before your vehicle can be fully repaired. This is what is meant by the term uninsured motorist or underinsured motorist.

While your insurance agent might advise you that UMPD and collision are the same and thus you only need one, you should consider how these types of claims can affect your rate. A collision claim is usually rated on your premium as an at-fault accident — meaning, it will cause your premium to increase. However, a UMPD claim has more variance than a collision claim in terms of a premium increase. We recommend speaking with your insurance company if you’re considering dropping this coverage to see how a UMPD claim would be rated. If your insurance company would consider a UMPD claim to be the same as a collision claim, you probably don’t need this coverage.





What’s the cheapest insurance company for $500 deductibles?


While you do have some flexibility in terms of your choice of deductible, $500 is pretty standard. So, in our efforts to determine which insurance company has the cheapest premium with a $500 deductible, we surveyed some top insurance companies across the US with this deductible selected. Here are the results.


6 Month premium with a $500 deductible

Company Premium
Allstate $786
Geico $709
Farmers $677
Liberty Mutual $736
Nationwide $644
Progressive $729
State Farm $748
USAA $734

As you can see, with all metrics constant, Nationwide is the cheapest insurance company surveyed. Consider, however, this is only a reflection of our standard user profile which might not be reflective of you. Use our data as a starting point and try to look at as many companies as possible.





What’s the cheapest insurance company for $1,000 deductibles?


While many drivers chose a $500 deductible, $1,000 car insurance deductibles are still pretty common. Just like we did with our $500 deductible, we surveyed some top insurance companies with our preferred deductible of a $1,000. Here are the results.


6 month premium with a $1,000 deductible

Company Premium
Allstate $701
Geico $632
Farmers $592
Liberty Mutual $653
Nationwide $567
Progressive $646
State Farm $666
USAA $562

As you can see, Nationwide is still the cheapest insurance company. Consider, however, how the premiums vary based on how your deductible changes. Which brings us to our next topic; how your premium and deductible are related.





How does your deductible affect your car insurance rate?


As we’ve demonstrated, your premium will be lower if you have a high deductible. This simply means your deductible and premium are inversely related. This is because of the nature of car insurance deductibles — they represent your insurance company’s portion of responsibility for a claim. So, by raising your deductible you lower what your insurance company would have to pay in the event of an accident. Here is a generalized expression of this:


Average Annual Premium by Coverage Level

Coverage Level Average Annual Premium
Liability Only $672
$500 Deductible $1,427
$1,000 Deductible $1,268




How to choose your deductible?


Because there is some premium variance based on the deductible you chose, you should consider your deductible amount carefully. Here are some things to consider when thinking about your car insurance deductible.


Does your lien or lease require a certain deductible?

If you’re leasing or have a loan for your vehicle, you might not have an option when it comes to your deductible. Because of the way your lease and loan agreements are designed, you have a 3rd party with an invested interest in your vehicle. Meaning, if anything happens to your vehicle, they’re going to want it repaired. By having a high deductible, they fear you might not be able to pay it. Thus, most liens and lease agreements require a $500 deductible or lower.



How likely are you to file a claim?

If you’re deciding between a $500 deductible versus a $1,000 (or any other options), you should consider how frequently you will be using these coverages. This would refer to having a loan or lease on your vehicle which would require you maintaining the vehicle in near perfect condition. Or it could mean having someone on your policy who is less experienced behind the wheel, i.e., teenagers. If you’re worried about your teen damaging your vehicle often, as teens do, a lower deductible might help settle your fears about future expenses.



Do you want to avoid filing a claim?

Car insurance has an annoying habit of working as a double-edged sword: the more you use it, the more expensive it is. This is especially true with your collision deductible. Insurance companies often see collision claims as at-fault accidents, which, in 2017, raised premiums by an average of 43% per year. While it can vary by state, most at-fault accidents will on your insurance record for 3 years. Meaning, your premium will be increased for 3 years following any at-fault claim. This can refer to a liability claim or collision.


Increase after an at-fault accident

No accidents Increase at 6 months Increase at 12 months Increase at 3 Years
$714 +$343 +$688 +2,604

As you can see, filing an at-fault where the damages are greater than $2,000 will raise your premium an average of $611 a year or $1,833 for the full 3 years. Because of this, insurance experts encourage having a high deductible as it discourages you from using it. You should use your collision coverage, however, if you suffer a catastrophic loss where the value of the premium increase plus your deductible is less than the cost of repairs. For example, if you total your vehicle.





Where to find car insurance with my preferred deductible?


Even if you’re not sure what amount of deductible you want, you can shop rates from hundreds of different car insurance companies with us here. Get started today.


Compare over 200 insurance companies at once!


Additional Resources


For more information on your insurance coverage or additional ways to save, see here:





Method to Our Madness: how we do it


Between September and December 2017, The Zebra conducted comprehensive auto insurance pricing analysis using its proprietary quote engine, comprising data from insurance rating platforms and public rate filings. The Zebra examined nearly 53 million rates to explore trends for specific auto insurance rating factors across all United States zip codes, averaged by state, including Washington, DC.

Analysis used a consistent base profile for the insured driver: a 30-year-old single male driving a 2013 Honda Accord EX with a good driving history and coverage limits of $50,000 bodily injury liability per person/$100,000 bodily injury liability per accident/$50,000 property damage liability per accident with a $500 deductible for comprehensive and collision. For coverage level data, optional coverage (that must be rejected in writing) is included where applicable, including uninsured motorist coverage and personal injury protection.

National property and casualty losses information is from the Insurance Information Institute and the NOAA National Centers for Environmental Information U.S. Billion-Dollar Weather and Climate Disasters report.

For vehicle make and model data, analysis referenced the most popular vehicles in the U.S. by 2016 year-end sales according to Goodcarbadcar.net’s automakers’ data.

Finally, some rate data may vary slightly throughout report based on rounding.


Recent Questions:

Car Insurance Deductibles

Should I drop collision coverage?

Jun 13, 2018

My car is recently paid off, my deductible is $500 and it has 192k miles. I drive 35k miles/year. I ...

Can I add full coverage later if I only have liability

Jun 09, 2018

If I just have liability, can i, at a later date, change to full coverage? Or do I have to ...

One deductible for two accidents?

May 31, 2018

Two accidents w/ objects 2 weeks apart. One damaged front bumper, other the back bumper. Can I file 1 claim ...

Should I pay out of pocket for damage I caused?

May 06, 2018

Pay out of pocket for repair to another car or turn in to insurance company? 20 yr old female tapped ...

Additional Resources:

Car Insurance Deductibles

Will Insurance Companies Turn to Social Media to Assess Your Risk?
Will Insurance Companies Turn to Social Media to Assess Your Risk?
Oct 21, 2015

In the week following October 10, a story of law enforcement cracking down on a drunk driver spread quickly across...

It’s Not You… Or Is It? What Might Cause Your Insurance Company to Drop You
It’s Not You… Or Is It? What Might Cause Your Insurance Company to Drop You
Jul 05, 2016

Car insurance companies may occasionally cancel policies if customers fail to pay the premium, commit insurance fraud, make unapproved modifications that change the...

Why Your Auto Insurance Rates Could Be Rising This Year
Why Your Auto Insurance Rates Could Be Rising This Year
Feb 01, 2016

Rate increase? Click to find the cheapest rates on car insurance →   Lower gas prices = more road traffic...

Editorial: A Need for Optionality in Insurance
Editorial: A Need for Optionality in Insurance
Sep 19, 2017

Today The Zebra announced that we closed a record-breaking $40 million Series B funding round, led by Accel Partners. As...

How to Get Car Insurance for Undocumented Citizens
How to Get Car Insurance for Undocumented Citizens
Aug 27, 2015

Purchasing car insurance: for US citizens, it’s often a rather mundane chore—something that whittles away at disposable income, but without...

The Strangest Insurance Policies We’ve Ever Heard Of
The Strangest Insurance Policies We’ve Ever Heard Of
Sep 16, 2016

At The Zebra, insurance is our bread and butter. But in this enormous and complicated industry, there are lines of...

Survey: Americans in the Dark about Car Insurance
Survey: Americans in the Dark about Car Insurance
Oct 24, 2017

“What you don’t know can’t hurt you…” … is an entirely false statement in the world of auto insurance. Car...

Drive Less, Pay Less? The Truth About Mileage and Car Insurance
Drive Less, Pay Less? The Truth About Mileage and Car Insurance
Sep 15, 2015

Driving fewer miles can mean insurance premium savings—for some people with some insurance carriers. So how much less must you...

Could Your Voting Record Affect Your Car Insurance Rates?
Could Your Voting Record Affect Your Car Insurance Rates?
Jun 12, 2015

Anyone who’s ever searched for an auto insurance company knows by the questions they’re asked—plentiful and at times personal—that a...

Insurance Telematics USA 2015: A Conference Looking to the Future
Insurance Telematics USA 2015: A Conference Looking to the Future
Jul 07, 2015

Pop quiz: What’s the largest potential technological disrupter of the car insurance industry? (Besides The Zebra, of course.) Answer: telematics....

Editorial: A Need for Transparency in Car Insurance
Editorial: A Need for Transparency in Car Insurance
Jan 26, 2016

By Alyssa Connolly, The Zebra We have exciting news on The Zebra front! Today we announced that we closed $17...

When Traffic Tickets Cause Insurance Premiums to Rise
When Traffic Tickets Cause Insurance Premiums to Rise
Jun 30, 2015

A traffic ticket of any kind is bad enough—the extra money, the time spent in traffic court or diversion, the...

When Does a Little White Lie Become Insurance Fraud?
When Does a Little White Lie Become Insurance Fraud?
May 09, 2016

In the U.S., drivers are legally required to carry auto insurance. (Even in New Hampshire, the only state where drivers...

Should Price Optimization Be Illegal?
Should Price Optimization Be Illegal?
Feb 23, 2015

If you haven’t had a car accident or made an insurance claim recently, you probably only think about your car...

Why Tesla is Opting to Insure Its Own Cars
Why Tesla is Opting to Insure Its Own Cars
Apr 13, 2017

As driverless vehicles become less a futuristic dream and more a reality, our current system – which is obviously based...

InsurTech Trends: Industry Experts Discuss Which Are Truly Innovative
InsurTech Trends: Industry Experts Discuss Which Are Truly Innovative
Aug 28, 2017

Insurance technology (also known as InsurTech or InsureTech) is en vogue. Whether it’s a new model of underwriting or new...

Don’t Count on Anti-Theft Devices to Lower Your Insurance Rate – Here’s Why
Don’t Count on Anti-Theft Devices to Lower Your Insurance Rate – Here’s Why
Nov 02, 2016

We know that tech and automotive companies are racing to create increasingly connected, autonomous cars. In fact, many of us...

Move Over Millennials: The Auto Industry is Interested in Your Grandparents
Move Over Millennials: The Auto Industry is Interested in Your Grandparents
Oct 16, 2015

The defining characteristics of the 80 million young people currently between the ages 18 and 34 has been much debated....

The Absurd Spectrum of Auto Insurance Fraud
The Absurd Spectrum of Auto Insurance Fraud
May 24, 2016

Far from a victimless crime perpetuated against bloated corporations, insurance fraud reaches into the lives of everyday citizens. It costs the industry...

How Does the Government Affect What You Pay for Car Insurance?
How Does the Government Affect What You Pay for Car Insurance?
Mar 12, 2017

  With auto insurance rates on the rise over the last five years, I’m constantly asked who’s responsible for auto...

This Guy Could Revolutionize Insurance Company Reviews
This Guy Could Revolutionize Insurance Company Reviews
Jul 24, 2014

You just can’t try insurance before you buy it—not really. You can read car insurance company reviews via some online...

Car Insurance Scams: Are You A Target?
Car Insurance Scams: Are You A Target?
Aug 10, 2015

Sometimes things aren’t what they seem at the scene of a car crash, or even on the repair shop floor....