What Is a Car Insurance Deductible?

A car insurance deductible is the amount of money you pay out of pocket toward a covered claim before your insurance pays the rest. If your car collision claim is $4,000 and you have a $500 deductible, you pay $500 and the insurer pays $3,500. Deductibles apply only to physical damage lines (collision and comprehensive) in a standard U.S. personal auto policy; liability and uninsured-motorist bodily injury have no deductible in most states.

Which parts of a policy have deductibles

• Collision: yes. Pays for damage to your car from a collision. Common deductibles: $250, $500, $1,000.
• Comprehensive: yes. Pays for non-collision damage (theft, vandalism, hail, falling object, animal strike). Common deductibles: $100 to $1,000; most states cap deductibles for comprehensive glass at $0 or $100.
• Liability: no. The insurer pays the other party directly up to the policy limit; you have no deductible to pay.
• Uninsured-motorist bodily injury (UM-BI): typically no deductible.
• Uninsured-motorist property damage (UM-PD): yes in some states; typical deductible is $200 or $300.
• PIP / MedPay: no deductible in most states, but some PIP policies offer buy-down options with deductibles from $250 to $1,000 in exchange for a lower premium.

How changing your deductible changes your premium

• $250 to $500 deductible: typically saves 5 to 10 percent on collision + comprehensive premium.
• $500 to $1,000 deductible: typically saves 10 to 15 percent.
• $1,000 to $2,000 deductible: saves another 5 to 10 percent, but diminishing returns.

Rule of thumb: never choose a deductible larger than the cash you can comfortably pay without borrowing. The premium savings are not worth it if a $2,000 bill after a crash would push you to a credit card at a 24 percent APR.

Per-claim or per-year?

Standard U.S. personal auto deductibles are per-claim, not per-year. If you have two separate at-fault accidents in the same policy year, you pay the collision deductible twice. (This is unlike health insurance, where deductibles usually reset annually.)

Vanishing and disappearing deductibles

Some insurers (Allstate, Nationwide, The Hartford AARP) offer a disappearing or vanishing deductible feature: the deductible shrinks each year you are claim-free, typically by $50 to $100 per year up to a cap. See accident forgiveness and vanishing deductible for how these features actually work.