A deductible is the amount you need to pay before your insurance will start paying for insurance claims. While similar to deductibles in medical insurance, deductibles in car insurance work a little differently. Here’s everything you need to know about deductibles in car insurance, from how they work to choosing the right deductible for you.
What is a Deductible in Car Insurance?
Your deductible is your share of the cost in the event of a claim. It’s what you pay “out of pocket” before your insurance starts paying. A deductible is not the same as your premium, which is what you pay to maintain your policy. You may have to pay your deductible every time you file a claim.
You’ll get to select your deductible when you purchase insurance. Each coverage option you purchase has its own deductible, so you can select a different amount for each option. And, you can always raise or lower your deductible at any time.
High Deductible vs Low Deductible
Your premium is related to your deductible. A low deductible means you pay less in the event of a claim, but your insurance premium will be a little higher. Raising your deductible will lower your policy’s premium.
However, this means you’ll need to pay more out of pocket if you need to file a claim. You risk spending more money on claims when you take on a higher deductible.
There are still advantages to having a low deductible. While you may pay more each renewal, you pay less out of pocket when you file a claim.
Plymouth Rock offers deductibles from $100 to $2,500, but the most common deductible is $500.
The higher your deductible, the lower your premium and vice-versa.
Windshield damage is one of the most common comprehensive claims made, and many insurers offer separate windshield deductibles. At Plymouth Rock you can select a $0 windshield deductible, which means you won’t have to pay to replace a windshield in a covered loss. Plymouth Rock also offers a $100 Glass Deductible option, which applies a $100 deductible for glass only claims.
What is the Right Deductible for Me?
There isn’t one right answer to choosing a deductible— it depends on your own financial situation and tolerance for risk. No one can anticipate when or where an accident will happen, so consider how much you’re comfortable paying in the event of an accident.
If you want to avoid a sudden expensive repair bill, having a low deductible might be better for you. A lower deductible can also be a smart choice for drivers with older, low-value cars.
A higher deductible means a lower insurance bill, but be sure you can afford to pay for sudden expenses. Increasing your deductible can be a good way to lower your insurance costs while maintaining full coverage.
What Types of Insurance are Impacted by Deductibles?
When it comes to car insurance, deductibles typically apply to your non-liability coverage. Collision and comprehensive coverage are the most common types of insurance that are impacted by deductibles.
| Coverage Impacted by Deductibles |
| Collision |
| Comprehensive |
| Personal Injury Protection/Medical Benefits |
| Uninsured/Underinsured Motorists |
Collision coverage pays for the cost to repair or replace your car after a collision with another vehicle or object.
Comprehensive coverage pays for damage to your car not related to a collision. This includes things like:
- Natural disasters and storms
- Fires
- Theft
- Vandalism
- Damages caused by hitting an animal
Other types of insurance impacted by deductibles may include personal injury protection, medical payments coverage and uninsured/underinsured motorist coverage.
Deductibles do not affect liability insurance, which protects you if you’re responsible for injuring someone or damaging someone’s property.
How do Deductibles Work?
Car insurance deductibles must be paid every time you file a claim. A deductible is your share of the responsibility to pay for a claim. After you pay your deductible, your insurance company will pay the remainder of the expenses. For example, if your vehicle suffers $2,000 in damages and your deductible is $500, you will pay $500 and your insurance will pay the remaining $1,500 to repair your car.
Your insurance will not pay for anything until the deductible is met. If the cost of the damage is below your deductible, you will be responsible for paying for the entire cost. For example, if your vehicle suffers $400 in damages and your deductible is $500, your insurance will not pay for any of the repairs.
If you damage someone else’s car, your property damage liability coverage will pay for their repairs. You don’t pay a deductible for this liability coverage. If your own car is damaged as well, your collision coverage will pay for repairs after you pay your deductible.
Accidents With Another Driver
Generally, if your car is damaged by another at-fault driver you can pursue damages from their car insurance company. That company must first conduct their investigation into liability for the claim. It may take weeks or months before you receive the money to repair your car.
Instead, you can file a claim with your own insurance policy to get your vehicle fixed faster. You will pay your deductible if you choose to go through your own insurance company. Your insurance company will then seek reimbursement from the other driver’s insurance company. If the process is successful, you may receive a refund for all or part of your deductible, depending on the circumstances of the accident.
Hit-And-Run Accidents
In the case of an accident with a driver who is uninsured or unidentified, you’re responsible for repairs for your own car. You can file a claim with your insurance company if you have collision coverage and pay your deductible.
Total Loss
If your car is totaled, you will typically receive the actual cash value of your vehicle at the time of the accident, minus your deductible.
How to Save Money on Car Insurance
If you’re looking to save money on your car insurance premium, raising your deductible can help. A higher deductible may lower your car insurance premium. This is because you’re responsible for paying more in the event of a claim.
If you have questions about deductibles, give us a call. One of our insurance experts will be happy to guide you through your coverage options. If you’re looking for even more ways to save, we can help you with that, too!
