A deductible is your share of a covered loss, commonly under collision or comprehensive. Check the deductible for that coverage and event; it is different from a premium or coverage limit. Compare actual premium offers and what you could pay after a loss.
Key takeaways
- Establish coverage before subtracting a deductible.
- A loss below the deductible does not create a negative insurance payment.
- A lower premium can mean a larger repair share; use actual equivalent offers.
On this page
A car insurance deductible is the bit that you have to pay after an insurance company agrees to pay for the damage to your own vehicle. Whether they agree to pay or not, depends on whether your policy actually covers the damage - the deductible doesn’t decide that. First look at what part of your policy might cover the damage, next check what its deductible is, then you can start thinking about the cost.
Which deductible applies?
Travelers makes the point that deductibles usually apply to collisions and comprehensive claims. However they can be different from the limits on liability, which is the bit that pays out for other people’s claims. Don’t assume that the deductible applies to your whole policy
Progressive’s explanation of deductibles mentions that there might be extra coverage specific deductibles, exceptions for glass damage, and programs to reduce your deductible. Don’t assume that all insurers offer these.
When looking at a deductible, it’s worth noting that a fixed dollar amount is easy to understand. If your paperwork uses a percentage, ask what that percentage actually amounts to - ie what is it applied to - rather than just accepting it as a percentage of the repair bill.
Deductibles are on a per loss basis, not an annual basis
The Texas Department of Insurance talks about the difference between auto insurance and health insurance deductibles. Paying out one time does not get you off the hook the next time you need a claim
Travelers also makes the point that a deductible is applied to the actual cost of a claim, not just the act of making a claim.
For example
A covered collision repair that costs $3,200 and has a deductible of $500 would mean you’d have to cover the first $500 of that, and the insurance company would take care of the rest.
| Covered repair amount | Deductible | Simplified insurer payment | Your repair share |
|---|---|---|---|
| $3,200 | $500 | $2,700 | $500 |
| $300 | $500 | $0 | $300 |
The second row in this model shows that the deductible isn’t always the whole amount: a $300 repair bill leaves you with a $300 bill, not a $500 one. Payment is the greater of zero, and the amount left over after the deductible is applied. These figures are just examples, not real quotes or settlement predictions.
Deductibles get subtracted from payment; how you pay the repairer is up to the claim arrangement. Before sending a cheque to the insurer, ask for a breakdown of the repair cost, the deductible and any adjustments.
A deductible is not a limit of coverage
A deductible is the part of a claim that you have to pay - a limit is the maximum amount that the insurer will pay. Raising a deductible does not increase the amount of coverage, or remove exclusions from your policy. You have to decide separately if you want to raise your liability limit.
For a total loss
Do not start with a repair estimate that exceeds the valuation of your vehicle. Check what your policy says about settlement first.
Calculate the cost using the deductible calculator
Use the deductible calculator. This calculator is just a model of a claim - it’s not a vehicle valuation or a coverage decision
Compare your premium using actual offers
Higher deductibles usually mean lower premiums, says TDI and Travelers. But that doesn’t mean you’ll get a guaranteed saving - so ask the insurer to see what equivalent choices they can offer for the same policy period.
For example: Option A has a $900 premium, and a deductible of $500. Option B has $780 premium and a $1,000 deductible. B costs less in the year, but more if you need to make a claim.
| Scenario | A: premium plus repair share | B: premium plus repair share |
|---|---|---|
| No covered loss | $900 | $780 |
| One covered $3,200 repair | $1,400 | $1,780 |
| One covered $620 repair | $1,400 | $1,400 |
The $620 point where these two options are equal is just for this example - and does not take into account claim frequency or what is best for you.
Enter your own details in the deductible calculator
Use the same coverages, period and other terms. This tool does not calculate multiple claims, future premiums, or damage that is excluded from your policy.
Before you change your deductible
Ask yourself:
- Which coverage and vehicle will the change affect?
- Can I pay the larger amount promptly after a claim?
- Is the lower premium really worth it?
- Are there any conditions on a deductible reduction, or an extra charge?
- When will the change take effect - and is it confirmed in writing?
Frequently Asked Questions
Do I pay a deductible when I report a claim?
Just making a claim does not mean you have to pay a deductible. Check how the claim and repair arrangement handle it.
Will a higher deductible save a certain percentage?
No - the savings are not guaranteed. Use actual equivalent offers and consider whether you can afford a loss, not just the lower premium.
Does someone else’s fault always remove my deductible?
Not always. Travelers says that your own coverage may initially apply its deductible, and you may get some or all of it back later. Ask about the actual claim process.
Sources & references
Use these references to verify the information in this guide.
Policy terms and state requirements can change. Verify details with official sources and a licensed professional. Read our editorial standards.