Pro Tip: Be sure to review the questions listed above, and talk to an insurance agent or use the Jerry
app to compare quotes for policies with higher and lower deductibles before you finalize your decision. Looking at quotes for policies with varying deductibles will help you assess your potential rates based on your deductible selection, and decide if a higher deductible is truly worth a lower premium. FAQs
Is it better to have a $500 deductible or $1000?
A $500 deductible will likely result in higher premiums than a $1,000 deductible, but you will only need to pay $500 to receive your claim payout, rather than $1,000. If you can afford a $1,000 deductible, your car insurance premiums will be lower with this option. But if you’d rather pay less for your insurance claims, a $500 deductible may be the better choice.
What is a car insurance deductible?
A car insurance deductible is the amount that a policyholder agrees to cover out-of-pocket before their insurer pays for a covered claim. Collision coverage, comprehensive insurance, personal injury protection (PIP), and uninsured motorist property damage coverage come with deductibles.
What is an advantage of high deductible car insurance?
The main advantage of having a high deductible is lower insurance costs. Higher deductibles take some of the financial burden of claims off the insurer, so policyholders with higher deductibles get cheaper car insurance rates.
What is the disadvantage of having a higher deductible?
The main disadvantage of having a higher car insurance deductible is the higher out-of-pocket costs for a claim. For example, if you purchase collision insurance with a $1,000 deductible, you will need to pay $1,000 before you receive coverage for the remaining expenses of your collision coverage claim.
Do I have to pay my car insurance deductible?
Yes, you must pay your car insurance deductible if you file a claim for collision coverage, comprehensive coverage, personal injury protection, or—in most cases—uninsured motorist property damage coverage. If you don’t pay your deductible, your insurer will not provide coverage for your claim.
Does full coverage car insurance have deductibles?
Yes, full coverage
car insurance with collision and comprehensive coverage will have deductibles for each. How do car insurance deductibles work?
When you file a claim with your insurance provider for a type of car insurance coverage that includes a deductible, you will need to pay your deductible amount before your coverage kicks in to cover the rest of the claim. The deductible you choose will represent the amount of money you’ll need to pay.
Will a higher deductible lower my monthly premiums?
Yes, a higher deductible will lower your car insurance premiums, whether you opt for monthly billing or a pay-in-full bill.
Are car insurance deductibles different from other insurance deductibles?
Yes, car insurance deductibles are different from renters insurance, homeowners insurance, and health insurance deductibles. While car insurance deductibles are dollar amounts, renters and homeowners insurance deductibles are percentage-based. Additionally, health insurance usually has an annual deductible limit, and includes coinsurance and copays, which you are also responsible for beyond your deductible.