High-Deductible Car Insurance (2025)

Your deductible affects what you pay in car insurance premiums. If your goal is to keep your monthly payments as low as possible, you may choose a high-deductible plan. After all, you’re a careful driver, and it’s unlikely that you’ll ever have to file a claim.

The truth is that accidents do happen, often when you least expect them. If you do get in an accident with a high-deductible car insurance plan, you’ll have to come up with a lot of money up front. So, before you commit to a high-deductible policy, consult an insurance agent or use Insurify’s car insurance comparison tool to shop around and explore different car insurance quotes.

What is a car insurance deductible?

An auto insurance deductible is the amount you have to pay out of pocket before your car insurance coverage kicks in and covers the remaining amount up to your policy limits.1

Let’s say you have a collision policy with a $500 deductible. If you hit another vehicle or stationary object, collision coverage will pay for the damage after you pay $500. As a driver, it’s your responsibility to choose the car insurance plan and deductible for your unique situation.

Standard deductible vs. high-deductible car insurance

How much you set for a deductible on your policy affects your car insurance premiums. The most common deductible amount is $500, but your options can vary among car insurance companies.

High deductibles are usually around $1,000 to $2,000, but choosing a comprehensive or collision deductible this expensive can help lower your car insurance premiums. Generally, the lower your deductible, the higher your auto insurance rates, and vice versa. If you want to pay less out of pocket when you file a claim, choose a deductible of $500 or less. If you want to pay lower monthly, quarterly, or annual car insurance premiums, then choose a high deductible of $1,000 or more.

Vanishing deductibles

Some insurance companies offer vanishing deductibles — also called disappearing deductibles — which are programs that reduce your collision or comprehensive deductible every policy term you go without filing a claim. For example, if you start with a $500 deductible and your auto insurer reduces it by $100 for every year you don’t file a claim, your deductible will be $300 after two claim-free years.

Insurance companies typically limit how much your deductible can decrease, but some auto insurers will let your deductible go to $0 under a vanishing deductible program.

How deductibles work

If you have a car insurance policy with a deductible and get into an accident, you’ll need to file a claim with your auto insurance company. Upon approval, you won’t have to send your car insurance company a check in the mail or give it your credit card number.

Instead, either your insurer will subtract your deductible amount from the approved payout of your claim, or you’ll pay the repair shop your deductible amount and your insurance company will cover the remainder.

When you’ll need to pay a deductible

If you have collision or comprehensive coverage on your auto policy, they’ll likely have two separate deductibles that you have to pay each time you file a claim.1 You’ll pay a deductible for comprehensive, collision, and sometimes glass coverage claims.

For example, imagine you need to file a comprehensive coverage claim because a windstorm caused tree branches to fall on and dent your vehicle. You’ll pay your deductible to the repair shop you took your car to, or your insurance company will deduct it from your payout.

In the case of an at-fault accident, your liability coverage pays for the other parties’ injuries and damages, and you’ll never pay a deductible for that.

High-deductible car insurance pros and cons

Before increasing your deductible, check out the advantages and disadvantages of a high deductible.

Who should consider high-deductible car insurance?

High-deductible car insurance isn’t for everyone. If you’ve had frequent past claims or live in a high-risk area where weather damage or theft occurs often, then it’s better to have a cheaper deductible.

However, claims-free drivers who live in areas with mild weather patterns and low car theft rates can consider high-deductible car insurance if they believe their risk of filing a claim is lower. In this case, a high deductible can keep your car insurance premiums cheap and let you put your extra money aside for savings.

How to choose the right deductible for you

When you buy an auto insurance policy, you need to choose deductibles for coverages like collision and comprehensive. Here are some guidelines to help you determine what your deductible should be:

• Ask yourself if you can afford the deductible. Calculate whether you can comfortably cover the deductible if you file a claim. If you have limited emergency savings, then a cheaper deductible may be the better option.

• Balance the deductible with the premiums. Do the math and figure out how much you’d save in premium costs with a higher deductible versus a cheaper deductible. The goal is to find a balance between affordable premiums and affordable deductibles.

• Think about your claims record. If you’ve had previous at-fault accidents or live in an area where many car insurance losses occur, then you should consider a lower deductible.

• Consider your car’s value. Expensive vehicles may mean more expensive repairs and more expensive premiums. If you can afford a more expensive deductible for a high-value vehicle, it may help reduce your auto insurance premiums.

Other ways to save on car insurance

If you’re considering a high-deductible car insurance policy, you may be looking for ways to save on insurance. Here are some tips for keeping costs low: