High Deductible Car Insurance Plans


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A car insurance deductible is the amount of money you have to pay out of pocket before your insurance policy will cover repairs or medical expenses.

High Deductible Car Insurance Plans

High Deductible Car Insurance Plans

By Daniel Robinson Author Daniel is a staff writer on the Guides team and has written for several automotive news websites and marketing companies in the US, UK and Australia, specializing in car finance and car care. Daniel is a leading authority on car insurance, loans, warranty options, auto service and more.

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Editor: Rashon Michner, Editor: Rashon Michner Managing Editor Rashon Michner is a Guides team editor with more than 10 years of experience covering personal finance and insurance topics.

If your car is damaged in an accident and needs repairs, you’ll have to pay a certain amount before your coverage will take effect. The amount you pay is called your car insurance deductible. Our team of tour guides will explain how car insurance discounts work, when to pay, and how to choose coverage when purchasing a policy.

We’ve researched the best car insurance companies in the country to help you find the one that suits your needs. We recommend comparing car insurance quotes from several providers before purchasing a policy.

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Average Car Insurance Deductible: Everything You Need To Know

The Guide team is committed to providing reliable information to help you make the best decisions about your vehicle insurance. Because our customers rely on us to provide objective and accurate information, we created a comprehensive rating system to rank the best car insurance companies. We collected data from dozens of auto insurance companies to rate companies based on a variety of ranking factors. The end result, after 800 hours of research, is an overall rating for each provider, with the highest-scoring insurance company at the top of the list.

A car insurance deductible is the amount of money you have to pay out of pocket before your insurance company will pay for car repairs or medical expenses in a car accident. You pay your deductible directly to the repair shop that repairs your car or the medical facility that treats you.

For example, let’s say you have a $500 deductible and you submit a claim for $2,500 in car repairs. You pay the mechanic $500, and then the insurance company pays the remaining $2,000 of the repair cost. If the cost of your repair is less than your deductible, you must pay the full cost yourself.

High Deductible Car Insurance Plans

Car insurance discounts work differently than health insurance discounts. Unlike auto insurance, health insurance deductibles reset each plan year. Your health care out-of-pocket costs accrue during the plan year and are not included in the deductible. Once your deductible is met, your health insurance company begins paying for medical expenses. This deductible will be reset when the policy is renewed.

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You can get discounts on your car insurance every time you file a required claim. Your out-of-pocket costs will not accumulate over time. Additionally, different types of insurance require different deductibles.

In most cases, you can choose a discount when purchasing car insurance. The deductible will affect your insurance premium. If you choose a higher deductible, you will pay a lower premium. A lower deductible usually means you pay higher premiums.

There are a few factors you should consider when choosing your deductible. If you live in a city with higher theft rates or in an area that experiences severe weather, you may want to choose a lower comprehensive deductible, as this type of policy covers things like theft and flood damage. To offset the increase in premiums, you can choose a higher collision deductible.

The most popular car insurance deductible is $500, but ranges range from $0 to $2,000. Most insurance companies set the default deductible at $500, but deductibles are often $250, $1,000, or $2,000.

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Vanishing discounts, sometimes called “vanishing” or “diminishing” discounts, are incentives offered by some insurance companies to reward drivers for safe driving habits. With these plans, your deductible will be reduced or even eliminated, and you’ll be able to avoid traffic violations or car accidents for longer.

A disappearing discount is basically a credit that applies to your deductible for each year you don’t have an accident or driving violation. This credit will be added to your deductible and reduced each year when you renew your policy. If you go long enough without an accident or coverage lapse, you’ll get a $0 deductible.

Some types of insurance require a deductible, while others do not. For example, liability insurance does not cover your medical bills or vehicle repairs, so there is no deductible on a liability policy. Each state has its own insurance regulations, so some states do not require deductibles for certain types of insurance.

High Deductible Car Insurance Plans

Covers you and your passengers for medical expenses, health insurance deductibles and funeral expenses after an accident, regardless of who is at fault

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Covers you and your passengers for medical expenses, lost wages, home services and funeral expenses, regardless of whose fault it is

Covers medical bills for you and your passengers if you are hit by a motorist who does not have adequate car insurance

Covers medical bills for you and your passengers if you are hit by a motorist without car insurance

Pay for your car repairs if you are hit by a motorist who does not have adequate car insurance

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If you are hit by a driver without car insurance, your car insurance will cover the cost of your car repairs

When looking for auto insurance, familiarize yourself with your state’s insurance guidelines. You don’t want to encounter a deductible requirement that you didn’t anticipate.

There are some common situations where you’ll pay a car insurance discount. These situations include:

If your car is damaged in a non-collision event, such as a natural disaster or vandalism, you must pay your deductible before your policy goes into effect.

Car Insurance Deductibles Explained

If you live in a no-fault state, you are required to purchase PIP coverage (although Kentucky, New Jersey, and Pennsylvania allow drivers to opt out). Depending on the state, you may pay your deductible before your policy covers any medical expenses. Utah does not allow PIP coverage to have a deductible.

There are two types of uninsured motorist coverage: bodily injury (UMBI) and property damage (UMPD). UMBI usually does not require a deductible, but UMPD often does. If you live in a state that imposes a UMPD deductible, you must pay that cost before your insurance company will cover your repairs.

In this case, you can file a claim with your own insurance and receive a discount while your car is repaired. Your insurance company will try to recover your deductible from the driver’s insurance company. You also have the option of suing the other driver.

If you were not at fault for the accident and the other party’s insurance covers the cost of repairs to the vehicle, you do not have to pay the deductible. If you join the disappearing discount program and you have earned enough points to cover the discount amount, you do not need to pay the discount.

How Do Deductibles Affect Car Insurance Premiums?

Choosing a deductible depends on understanding your financial situation. To better understand which discounts may suit your needs, consider the following factors.

When choosing your deductible, consider the likelihood that you will file an insurance claim. The higher your risk, the more likely you are to face a hefty bill. Drivers more likely to file an insurance claim:

If your car is more than 15 years old or is worth between $1,000 and $3,000, you may benefit from choosing a plan with no deductible, such as minimum coverage. Older or less valuable cars tend to have lower insurance payouts, which means you may be required to pay all or most of the cost of repairs in the event of a claim.

High Deductible Car Insurance Plans

If you take out a loan or lease on a new car, the terms of your contract may require a specific deductible. If you have questions about discount requirements, check with your loan servicer or lessor.

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