Best Car Insurance with a $500 Deductible (2025)
With a $500 car insurance deductible, you’ll pay less out of pocket if you need to file a claim, but your monthly premiums will likely be higher.
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A car insurance deductible is the amount of money you agree to pay before your insurance company pays for a covered collision or comprehensive claim. Choosing a deductible amount is one of the biggest decisions you’ll make when shopping for car insurance.
For $500 deductible car insurance, the average cost of a six-month full-coverage policy is $1,470, Insurify data shows. Allstate, American Family, and Erie Insurance top the list as some of the best car insurance companies for policies with a $500 deductible.
Quick Facts
NJM offers the cheapest full-coverage policy with a $500 deductible, at $66 per month on average, but it’s only available in New Jersey, Pennsylvania, Ohio, Maryland, and Connecticut.
Car insurance typically costs more with a $500 deductible than if you choose a higher out-of-pocket amount.
Your deductible applies when your collision or comprehensive insurance covers a claim; liability insurance doesn’t have a deductible.
How car insurance deductibles work
When filing a claim for damage to your vehicle, your insurer typically requires you to pay a deductible before it picks up the remaining costs. You select the deductible amount when enrolling in your car insurance policy. Common options are $250, $500, and $1,000.[?]
Auto insurance deductibles are a way to share the financial risk between you and your insurance company. They apply to damage claims for your vehicle, not liability insurance claims, and you’ll pay them each time you file a claim.
A higher deductible can help you get a lower car insurance rate. But it means you’ll have to dig deeper into your wallet in case of an accident, so make sure you’re comfortable with the deductible amount you choose.[?]
Keep in mind if you have both collision coverage (for car crashes) and comprehensive coverage (for non-collision events), you might have two separate deductibles.
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Cheapest car insurance with a $500 deductible
In the table below, you can see 10 of the cheapest car insurance companies for a full-coverage policy with a $500 deductible, according to Insurify data.
Insurance Company  | Average Monthly Quote: Full Coverage |
|---|---|
| NJM | $66 |
| Auto-Owners | $94 |
| Erie | $109 |
| Root | $113 |
| USAA | $115 |
| Mile Auto | $123 |
| State Farm | $133 |
| GEICO | $137 |
| Safeco | $145 |
| Allstate | $159 |
Disclaimer: Table data sourced from real-time quotes from Insurify's 500+ partner insurance providers. Actual quotes may vary based on the policy buyer's unique driver profile.
Best car insurance with a $500 deductible
You pay for your auto insurance coverage through regular premium payments, as well as a set out-of-pocket deductible if you file a comprehensive or collision claim for covered damages. If you buy a policy with a $500 deductible, you’ll owe $500 any time you file a claim for a car accident or other covered damages.
Some top insurers that offer policies with a $500 deductible include NJM, Erie, and GEICO.
NJM: Cheapest rates
Regional insurer NJM provides some of the most affordable $500 deductible full-coverage policies. With an average cost of $66 per month, it’s a good balance between affordable premiums and quality coverage. You’ll find several discounts to keep rates low, including bundling, multi-car, and good student discounts.
Pros
Cheapest rates for policies with a $500 deductible
Above-average J.D. Power claims satisfaction rating
Offers gap insurance and rideshare coverage
Cons
Available in only five states
Not all discounts available in all states
Not as many add-on coverages as some other insurers
Erie Insurance: Best for customer service
GEICO: Best for discounts
Why deductibles affect premiums
When you select a higher deductible, such as $1,000 instead of $500, you lower your premium because you’re agreeing to pay for more of the initial costs when you file a claim. This shifts some of the financial risk from the insurance company to you, allowing them to charge you less for your policy — 15%–40% less, according to the Insurance Information Institute.[?]
For example, suppose you have $500 deductible car insurance, and your monthly premium is $245. If you increase your deductible to $1,000, you could potentially shave $37–$98 off your monthly cost. That’s an annual savings of $444–$1,176.
Of course, a high deductible means you’d fork over more cash if you file a claim, so pick an amount of money that won’t strain your finances.
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Cost of $500 vs. $1,000 deductible
Opting for a $1,000 deductible instead of a $500 deductible can be a good option if you have enough savings to cover a bigger bill when you file a claim. A high deductible can reduce your car insurance premiums, but it increases your financial responsibility when filing a claim.
A good rule of thumb is to choose the highest amount you can afford. A $500 deductible might be more manageable for drivers without a large emergency fund, even though a smaller deductible translates into slightly higher insurance premiums.
Here’s a look at how much your monthly rates can change depending on the deductible you choose.
Deductible | Average Quote: Liability Only | Average Quote: Full Coverage |
|---|---|---|
| $500 | $120 | $245 |
| $1,000 | $100 | $177 |
Disclaimer: Table data sourced from real-time quotes from Insurify's 500+ partner insurance providers and quote estimates from Quadrant Information Services. Actual quotes may vary based on the policy buyer's unique driver profile.
Pros and cons of a $500 deductible
Pros
Pay less up front when filing a comprehensive or collision claim
Easier to fix your car without waiting
Less financial worry in case of an accident
Cons
Higher insurance premiums
Safe drivers may pay more over time
Filing multiple claims with a lower deductible could lead to rate increases and negate any savings
Other ways to lower car insurance costs
You have other ways to lower your premium besides increasing your deductible. If you prefer a lower deductible or have already chosen the highest deductible you can afford, you can try the following strategies to keep your car insurance costs low:
$500 car insurance deductible FAQs
You have lots of things to think about when choosing an auto insurance policy. Consider speaking to an insurance agent if you have questions about specific policies from a certain car insurance company. Otherwise, find answers to help you navigate the process below.
Is it better to have a lower car insurance deductible?
A lower auto insurance deductible may sometimes work better than a higher one, but it depends on what you can afford. A higher deductible results in lower premiums, but you need to have access to out-of-pocket funds in the event of an accident. Your policy deductible should be an amount you can comfortably pay out of pocket.
Which company has the cheapest full-coverage $500 deductible?
NJM offers the cheapest full-coverage car insurance policy with a $500 deductible, with an average cost of $66 per month.
Is a $500 deductible good for car insurance?
A $500 deductible is a standard option that helps balance lower premiums with manageable out-of-pocket expenses. What’s best for you depends on your individual financial needs.
What is a normal car insurance deductible?
Normal car insurance deductibles range from $250 to $1,000. But $500 is the most common deductible amount, making it a good choice for most drivers.
When do you have to pay the $500 deductible?
You pay the $500 deductible whenever you file a collision or comprehensive claim for covered damages, such as after an accident. Your amount is due before your insurance covers the remaining costs.
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