auto insurance

Understanding Car Insurance Deductibles

When shopping for a car insurance policy, an insurance deductible is one of the main costs you need to be aware of. A policy deductible is an amount you are responsible for in the case you have a car insurance claim. With a deductible, you can either be required to pay a particular amount or a percentage of the total amount of the policy. States insurance regulations state the way deductibles are integrated into the semantic of a policy and how the deductibles could be implemented, and these laws can vary from one state to the other. In this article, we will take a further look into car insurance deductibles.

How Does Car Insurance Deductible Works?

An auto insurance deductible is the amount an insured agrees to pay out of his or her own pocket to repair or replace their car after a car accident. For instance, if you are involved in an accident that causes $8,000 of damage to your car, and you have an $800 deductible, the insurers should cover $7,200 of the claim while you are required to pay $800. Your deductible amount is something you’ll determine with your insurance carrier before finalizing your policy.

Types of Car Insurance Deductibles Available

You have the option to choose your insurance deductible amount for each policy. For instance, you can choose a $700 deductible for comprehensive auto insurance, which tends to have lower premiums, but $1,200 for collision, which costs more. You can also decide to opt for a separate deductible for things such as car windshield repair or replacement, and this can come with a deductible option for as low as $0.

Keep in mind that not all auto insurance policy includes a deductible. For instance, liability insurance never uses a deductible. Liability insurance provides coverage for damages an insured causes to another person or their property.

The most common auto insurance type of coverages that utilize deductibles are comprehensive and collision auto insurance. A collision insurance policy covers your car irrespective of whose fault it is. On the other hand, comprehensive insurance provides for damage that is out of your control, such as vandalism, falling objects, floods, and fires.

If you have coverage for uninsured/underinsured motorists or personal injury protection, these policies may also cover deductibles. Personal injury protection provides coverage for your medical bills and that of your passengers, and some states require you to have this type of coverage. Uninsured motorists provide coverage in the event your car is hit by drivers who don’t have auto insurance or insurance coverage that can’t cover the full extent of damage caused.

When Are You Required to Pay Your Car Insurance Deductible?

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Generally, car insurance deductible comes into effect when the person that causes the accident doesn’t matter, or the injuries/damage was due to an accident that was your fault. For instance, if you are the cause of the accident that damage your car, you are required to file a claim with your auto insurance company using your collision coverage and paying the deductible. If you have personal injury protection and are injured during an accident, your auto insurance coverage will cover your medical expenses and requires a deductible.

In a situation where the fault is negligible, you will also be responsible for a deductible. For instance, if a structure collapse on your vehicle and you file a claim through your comprehensive auto insurance policy, you will still be responsible for deductible even though you are not at fault. The same thing also applies to medical bills.

In no-fault states such as New York, New Jersey, North Dakota, and Florida, your insurer is required to cover your medical expenses after an auto accident, no matter who is at fault. However, these states usually require car owners to have personal injury protection coverage, so you will have to cover your deductible.

How To Choose Deductible Amount?

Under most conditions, when you file a claim, you will be responsible for the insurance deductible. So, it is important that you opt for a deductible amount you are comfortable paying out of pocket. Secondly, the amount of the deductible will affect your insurance premium. If you opt for a low deductible amount, you will likely have to pay a higher insurance premium for the car insurance coverage and vice versa.


Choosing the right deductible amount can considerably help your finances in case of an accident. However, before choosing an auto insurance plan, you need to analyze all options available and make a decision based on your needs and budget. Also, it is best to discuss our deductible options with an independent auto insurance agent, and don’t be afraid to ask questions.