What is a car insurance deductible, and how does it work?
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Founder of Huntley Wealth & Insurance Services
Rachael Brennan has been working in the insurance industry since 2006 when she began working as a licensed insurance representative for 21st Century Insurance, during which time she earned her Property and Casualty license in all 50 states.
After several years she expanded her insurance expertise, earning her license in Health and AD&D insurance as well. She has worked for small health insu…
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Reviewed by
Rachael Brennan
Licensed Insurance Agent
UPDATED: Jan 7, 2022
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Here’s the Scoop
The average car insurance deductible is $500
You will have to pay your car insurance deductible before your car insurance policy will cover any repairs on your vehicle
In order for car insurance to cover repairs after an accident, you must have collision coverage or full coverage
If you are ever in a car accident or your car is damaged, you may want to use your car insurance to help cover the necessary repairs. But what is a car insurance deductible? And how does a car insurance deductible work?
Before your car insurance makes any payments for coverage, you will have to meet your car insurance deductible. Every deductible may be different, so the only way to know yours will be to speak with your car insurance company.
After you read this article to learn more about the meaning of an insurance deductible, you should shop around online to find the best car insurance companies that offer the lowest collision deductibles with the best coverage options.
You can use our free quote tool above to find affordable car insurance in your area with a low deductible.
What does “deductible” mean in car insurance?
If you are a new driver, you may be wondering, “What is a deductible in car insurance?” Your car insurance deductible is the amount of money you have to pay on repairs before the company begins paying for repairs to your vehicle.
Car insurance deductibles can be anywhere from $50 to $2,000, though the average car insurance deductible is around $500.
If you are driving and are in an accident, you could be facing thousands of dollars worth of repairs for your car. With a car insurance policy that has a $500 deductible, you will only have to pay $500 toward your repairs, and your car insurance company will cover the rest.
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When do you pay the deductible for car insurance?
You will not need to pay your car insurance deductible unless you are in an accident or your car is damaged in some way. As long as you drive safely and your car isn’t damaged, you will be able to simply pay your car insurance premiums and never have to worry about paying your deductible.
If your car is damaged in an accident or some other event, you will have to pay your deductible before expecting your car insurance to cover any repair costs.
Some people choose not to pay their car insurance deductibles if the repairs to their vehicle will not be expensive. For example, if you need to have your windshield repaired, it could cost $125 to $300. Because this cost is less than a $500 deductible, it’s smarter to simply cover the cost out of your own pocket than to file a claim with your insurance company.
Even if vehicle repairs are over your deductible amount, you may choose not to file a claim with your insurance company if you’re worried about your rates increasing.
How do I pay my deductible?
You will not need to pay your deductible directly to the insurance company. Instead, you will just pay the deductible amount in coverage for your car repairs before your insurance kicks in.
For a car insurance policy with a $500 deductible, your insurance will begin to cover your car repairs once you’ve paid the first $500 toward repairs with your own money.
Car insurance can be extremely helpful when it comes to paying for repairs after an accident or vandalism, but your car insurance will only make those payments if you carry certain types of coverage. If you don’t have the right coverage, you could be left paying for all of it yourself.
What coverage do I need to cover damage to my car?
The type of coverage you need to help pay for damage after an accident depends on the circumstances. If you were in an accident and someone else was at fault, their insurance should cover the cost of any repairs your vehicle needs. The only exception to this is if they are driving uninsured, in which case you may need uninsured/underinsured coverage to help pay for damages.
If you were in a car accident and it was deemed your fault, but you only carry the state’s minimum requirements for car insurance, your insurance will cover repairs for damages to the other vehicles involved but will not pay to repair your car.
The two coverage options that will help you pay for repairs to your vehicle are collision and comprehensive coverage. Collision coverage will pay for damage from a car accident, and comprehensive coverage will pay for repairs to your car after theft, vandalism, or damage from a storm.
Without the right type of car insurance, you could end up paying out-of-pocket for everything instead of just paying the deductible for your policy.
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How much is full coverage car insurance?
If you are interested in finding full coverage for your vehicle to make sure you’d be covered in the event of a car accident, your rates will vary depending on a number of factors, including:
Your age
Your gender
How long you’ve been driving
Your credit history
How much you drive
Your car’s make and model
Your driving history
How often you drive
If you are a first-time driver, you can expect your car insurance rates to be higher than average. The same goes for if you have filed multiple claims in the past or have a bad credit history.
It’s impossible to know how much you would pay for car insurance until you shop around for coverage to compare prices from multiple companies at once. The table below shows the average monthly rates between a liability-only car insurance policy and a full coverage policy in several U.S. states.
Car Insurance Rates by State
StateMonthly Liability-Only Car Insurance RatesMonthly Full Coverage Car Insurance Rates
Arizona$41$81
California$39$82
Georgia$41$87
Illinois$36$74
Indiana$31$63
Louisiana$61$117
Maryland$50$93
Missouri$33$73
Nebraska$29$69
Ohio$31$66
Oklahoma$37$84
Pennsylvania$41$81
Texas$42$92
Utah$39$73
Wisconsin$30$61
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As you can see, there can be a significant difference in cost between a liability policy and a full coverage policy. But you can shop around to find the most affordable plans in your area and ask about discounts to help your rates get even lower.
What’s the bottom line with deductibles?
There is a chance you may never need to pay your car insurance deductible. If you are never in a car accident, and if your car is never damaged by storms or vandalism, you could enjoy the security of car insurance without ever needing to use it.
But if you do need to use your car insurance, the deductible is your responsibility. Until your deductible is met, you will not receive any benefits from your insurance company.
You can shop around to find car insurance policies with low or vanishing deductibles, which would be helpful should you ever need to file a claim. But keep in mind that filing a claim with your car insurance could raise your insurance rates in the future.
Now that the insurance deductible has been explained, be sure to use our free tool below to find and compare rates from top companies in your area today.
