Vanishing Deductible Car Insurance

Allstate groups its disappearing deductible into a program called “Allstate Deductible Rewards.” This program offers a $100 bonus just for signing up. After this, you can receive $100 off your car insurance deductible for every year of safe driving. Like Nationwide, this will cap at $500 in savings. But because you immediately get the $100, it will take only four years to get to a $0 deductible, if that’s your end goal. Plus, you do not need to have an accident-free past in order to qualify for this insurance policy — unlike our next company, The Hartford.

The Hartford's disappearing deductible is a little different than other companies. First, you need to have five years of accident-free driving, and three of those years need to be with The Hartford. If you qualify for this, your collision deductible will reduce by $150. Each additional year after the five years will be met by a $50 reduction from your deductible amount. This program is only available through The Hartford's Advantage Plus package.

Liberty Mutual’s disappearing deductible program is called a Deductible Fund and they market it almost like a bank account. Upon signing up for the deductible fund, you earn $100 in the “deductible fund” account which goes to your collision deductible if you file a claim. Then, like other policies, your deductible decreases by $100 each year you haven’t had an accident until your car insurance deductible is $0. Unlike The Hartford, you do not need to be accident-free in order to qualify for this program.

This will depend on every detail of your policy so it’s impossible to give an estimate. But you can guarantee that this additional policy option will increase your insurance premium.

1. How likely are you to use your deductible?
2. Is the additional premium for this policy option cost more or less than your deductible?

Ask a representative of your insurance provider if having multiple vehicles causes the additional cost to be higher than only having one.

If you have The Hartford insurance, you’re required to have five years of accident-free driving in order to qualify for this program. However, that's not across the board. Ask your auto insurance company if everyone needs to have a clean record or just the policyholder.

Nationwide is the only company that extends this to your collision and comprehensive coverage. Comprehensive provides physical coverage to your vehicle against things other than collision. So, this means any damage done to your car by vandalism, animals, theft, or weather-related events.

The reason for this discrepancy might be the way insurance companies charge for comprehensive and collision claims. Usually, comprehensive-type claims do not raise your premium because they consider these claims not to be the result of human error. Collision claims, however, are usually charged as at-fault accidents and thus can be immensely impactful on your car insurance premium. In this sense, companies wouldn't extend this program to comprehensive claims because they wouldn't make up any costs by rate increases. Consider if this is something you are okay with.

Your insurance is subject to state regulations as well as company-specific regulations. Meaning, not every state will allow this practice.