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.
Low auto insurance deductibles can come at a cost. Learn more about the pros and cons of $500 deductibles.
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 quotes with a deductible of $500. Let’s get started.
Looking for a full explanation of car insurance deductibles? Consult our complete guide to auto insurance deductibles.
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.
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.
| Company | Monthly Premium |
|---|---|
| Allstate | $1,011 |
| Liberty Mutual | $863 |
| Farmers | $822 |
| Progressive | $809 |
| Nationwide | $714 |
| State Farm | $647 |
| GEICO | $602 |
| USAA | $545 |
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.
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:
| 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.
| Time After Accident | Average 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.
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.
