Best Car Insurance with a $500 Deductible

Low auto insurance deductibles can come at a cost. Learn more about the pros and cons of $500 deductibles.

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Car insurance with a $500 deductible

The average six-month premium for car insurance with a $500 deductible is a little over $900, or about $150 per month. $500 is considered a standard car insurance deductible.

We'll explore what deductibles are, how they impact your premium and your insurance policy, and which insurance companies offer the cheapest car insurance with a deductible of $500. Let’s get started.

 

Car insurance with a $500 deductible — table of contents:


Looking for a full explanation of car insurance deductibles? Consult our complete guide to auto insurance deductibles.

 


 

 

How much is car insurance with a $500 deductible?

Between the range of deductibles available — which can sometimes be specifically set by an insurance company — $500 is fairly standard. To find out which car insurance company offers the cheapest rates at this deductible level, we surveyed some top insurance companies' rates for a driver — profile outlined here — with a $500 deductible. 

 

Average Premium with a $500 Deductible.png
 

USAA is the cheapest insurance company — with GEICO close behind — for a policy with a $500 deductible. On average, a $500 deductible auto insurance policy costs $125 per month.

This reflects only our standard driver profile, which might not match your situation. Use our data as a starting point and try to look at as many insurance companies as possible.

 

SIX-MONTH AUTO INSURANCE PREMIUMS BY COMPANY — $500 DEDUCTIBLE
CompanyMonthly Premium
Allstate$1,011
Liberty Mutual$863
Farmers$822
Progressive$809
Nationwide$714
State Farm$647
GEICO$602
USAA$545

 

How are deductibles and insurance premiums related?

While your deductible is what you pay in the event of a collision, comprehensive, or UMPD insurance claim, your premium is what you pay every month — or every 6-12 months, depending on your billing cycle.

Basically, your deductible and your premium are inversely related; if you raise one, you lower the other. Let’s look at an example where you raise your deductible amount from $250 to $500. This would lower your insurance rates because you are taking a greater amount of financial responsibility for the potential repairs your insurance company would otherwise have to pay. If you were to cause $2,000 in damages to your vehicle, your insurance company would only have to pay $1,500 versus $1,750. So, they will reward you for their decreased financial responsibility by lowering your premium.

 

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Pros and cons of a $500 auto insurance deductible

While the $500 deductible level is common, there are other options — each of which alters the rates you'll pay and the financial consequences you'll face in the event of an accident. Because a lower deductible can mean higher insurance rates, increasing your auto insurance deductible to $1,000 can save a bit of money up front:

 

$500 vs. $1000 DEDUCTIBLE RATES — SIX-MONTH POLICY
Car Insurance Provider$500 Deductible$1,000 Deductible
Allstate$1,011$701
GEICO$602$632
Farmers$822$592
Liberty Mutual$863$653
Nationwide$714$567
Progressive$809$646
State Farm$767$666
USAA$647$562

 

On average, you could save $152 — or 19%! — per six-month insurance policy period by choosing a high deductible amount, such as $1,000 instead of $500. But there’s another reason to consider a higher deductible that can end up saving you thousands. By increasing your deductible, you also discourage yourself from using it and filing what would be considered an at-fault claim.

When you file a claim under your collision coverage (and sometimes for a UMPD insurance claim) after a car accident, your insurance company will raise your rates for what they see as an at-fault accident. An insurance company views collision claims to be at-fault accidents because they see you, the driver, as in control of the vehicle when the accident occurred. Thus, you’re responsible.

The average insurance company in the U.S. will increase your rates by nearly 50% after your first at-fault accident. Moreover, this rate increase will stay on your insurance record for three years — meaning that that percentage increase will persist all three years. Below, you can see some average estimates for a collision claim across the U.S. over three years.

 

INSURANCE RATE INCREASE AFTER AN AT-FAULT ACCIDENT
Time After AccidentAverage Premium Increase
No accidents$0
Increase at 6 months+$308.50
Increase at 12 months+$617
Increase at 3 Years+$1,851

 

As you can see, filing an at-fault claim where the damages are greater than $2,000 will raise your premium an average of $617 a year or $1,851 for the full three years. Because of this, most insurance experts recommend only filing an insurance claim if you suffer a catastrophic loss where the value of the premium increase plus your deductible is less than the cost of repairs.

Although you can expect a hefty increase from filing a collision claim, your comprehensive deductible is a little different. Your insurance company will generally consider comprehensive claims to be not-at-fault because they tend to happen outside the control of the driver. Thus, the monetary impact of a comprehensive claim is almost zero.

Despite the evidence that a $500 deductible may not be the way to go, it's still a pretty standard deductible. Plus, there are times when your deductible will be chosen for you. If you have a loan or lease on your vehicle, you might be required to maintain at least a $500 deductible. When you enter these types of agreements, you do not own the vehicle and thus are required to maintain the physical integrity of it. Your loan and lease company might fear if you have a deductible greater than $500, you will be unable to pay it. Thus, $500 is usually the maximum amount they will allow.

 

Other ways to lower your insurance premiums 

The amount of money that you pay for insurance is influenced by a number of things, including your coverage limits, driving history, credit score and — as discussed above — your insurance deductible. If you are unhappy with what your current insurance company charges, it may be time to consider shopping for a new car insurance policy. The Zebra can help you find free quotes from the nation's top insurance companies, giving you the chance to compare coverage options and insurance rates. Get started by entering your ZIP code below.

 

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Additional resources

For more information on deductibles and car insurance, see our additional articles.


Recent Questions:

Best Car Insurance with a $500 Deductible

Do I have to pay the deductible for the damages I caused while driving uninsured?

Sorry to hear about the accident. You are not responsible for their deductible, but you are responsible for all damages caused.

My car was hit by a drunk driver that ran off. Why do I owe a deductible if my car was damaged in a hit and run?

Your insurer should not at all be listing you as the liable or at-fault party in a hit-and-run claim. I recommend contacting your insurance company to ensure they are filing the claim accurately. If you're using uninsured motorist coverage for this claim, you could be responsible for your deductible; but depending on the circumstances, this could be reimbursed back to you. If you have any questions, feel free to ask.

Can it be cheaper to have two cars on an auto policy instead of just one?

Thank you for your question. This actually happens quite often.

How do I get a false claim off my insurance report?

I would call my prior insurance company (your renters provider) showing the false claim and see how they have it marked. I would also have them send confirmation that the claim was dropped and not paid out.

Ava Lynch LinkedIn

Based in Austin, TX, Ava has been in the insurance industry as a licensed agent for 4-plus years. Ava is currently one of The Zebra’s resident property insurance experts and has been featured in publications such as US News Report, GasBuddy, and Yahoo! Finance.