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What Is a Car Insurance Deductible? – Kelley Blue Book

How Do Deductibles WorkHow Do Deductibles Work

Car insurance can help pay for costly repairs and injuries after an accident. But it may not cover 100% of the cost. A car insurance deductible is the amount you’re responsible for paying out of pocket. Some types of coverage have a deductible, and others don’t. Whether you need to pay a deductible depends on the type of insurance claim you file and who (if anyone) is at fault.

What Is a Car Insurance Deductible?

A car insurance deductible is the amount of money you have to pay for repairs or injuries after a covered incident. Collision, comprehensive, uninsured motorist property damage, and personal injury protection (PIP) typically have deductibles. You get to choose the amount when you purchase coverage.

How Does a Deductible Work?

Paying a deductible after a covered loss is the policyholder’s responsibility. The insurance company will only pay for costs that exceed that amount. For example, let’s say you’re in an accident. Your car has $5,000 worth of damage, and you have a $1,000 deductible. The insurance company will write you a check for $4,000, and you have to pay a $1,000 deductible.

When Do You Pay a Deductible?

Paying a deductible isn’t a one-time event. If a deductible applies to your coverage, you must pay it every time you file a claim. If the amount of damage is less than your deductible amount, you will be responsible for paying the total repair cost out of pocket.

For example, let’s say you have $650 worth of damage to your car and a $1,000 deductible. The insurance company will only pay for costs that exceed $1,000. So, you must pay the entire $650.

What Is the Average Deductible Cost?

Deductibles often range from $100 to $2,500. Amounts vary by insurer and the type of coverage you’re purchasing. The average car insurance deductible is $500, according to American Family Insurance. If you have more than one type of coverage with a deductible, you can select different deductible amounts for each coverage type.

How to Choose a Car Insurance Deductible

There’s no right choice for everyone. The deductible amount that’s best for you depends on a combination of factors, including:

  • How much you can afford. It’s important to select an amount you can afford to pay if you need to file a claim. If you can’t afford to pay your deductible, you won’t be able to cover all the repairs. The insurance company will only pay for costs that exceed your deductible.
  • The value of your vehicle. If your car’s not worth much, opting for a high deductible doesn’t make sense. The insurance company will only pay for costs that exceed the deductible amount — up to the vehicle’s actual cash value. Find out what your car is worth with Kelley Blue Book’s valuation tool.
  • Your budget for insurance. If you’re on a tight budget, increasing your deductible can help reduce your premium. Just remember, you’ll need to be able to cover the deductible if you have to file a claim.

Should You Get a High or Low Deductible?

When you purchase auto insurance coverage with a deductible, you typically get to choose the deductible amount. The amount that’s right for you depends on your budget, tolerance for risk, and the value of your vehicle.

If your budget includes enough of a financial cushion to cover a higher deductible, it might make sense to opt for a higher deductible to save money on your premium. If not, a lower deductible may be a good fit for you. In general, higher deductibles are usually a better option for more expensive cars, and lower deductibles are a better option for less expensive vehicles.

If you think it’s unlikely you’ll need to file a claim, you might consider a higher deductible. No matter what amount you choose, it’s important to make sure you can afford to pay it if you need to file a claim following an accident.

What Car Insurance Coverages Have Deductibles?

Deductibles apply to some types of car insurance coverage but not to others. Here are several that typically come with a deductible attached.

  • Collision: This type of coverage helps pay for repair and replacement costs if you’re in a crash.
  • Comprehensive: Covers incidents that are out of your control and don’t involve a crash, such as severe weather, rodent damage, falling objects, theft, and vandalism.
  • Uninsured motorist property damage: Helps pay for vehicle repairs if the at-fault driver doesn’t have insurance or doesn’t have enough insurance to cover the cost of the repairs.
  • Personal injury protection: Covers injuries to you and your passengers. This type of coverage is not available in all states.

How to Avoid Paying a Deductible?

If an insured driver hits you, you do not need to pay a deductible since the other driver’s insurance will cover the damage. But if you ever need to file a claim with your insurance company, you will be responsible for paying the deductible. The only way to avoid paying one is by not filing a claim. But if you don’t file a claim, you will be responsible for 100% of the repair or replacement costs at a dealership or auto repair shop.

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Car insurance can help pay for costly repairs and injuries after an accident. But it may not cover 100% of the cost. A car insurance deductible is the amount you’re responsible for paying out of pocket. Some types of coverage have a deductible, and others don’t. Whether you need to pay a deductible depends on the type of insurance claim you file and who (if anyone) is at fault.
A car insurance deductible is the amount of money you have to pay for repairs or injuries after a covered incident. Collision, comprehensive, uninsured motorist property damage, and personal injury protection (PIP) typically have deductibles. You get to choose the amount when you purchase coverage.
Paying a deductible after a covered loss is the policyholder’s responsibility. The insurance company will only pay for costs that exceed that amount. For example, let’s say you’re in an accident. Your car has $5,000 worth of damage, and you have a $1,000 deductible. The insurance company will write you a check for $4,000, and you have to pay a $1,000 deductible.
Paying a deductible isn’t a one-time event. If a deductible applies to your coverage, you must pay it every time you file a claim. If the amount of damage is less than your deductible amount, you will be responsible for paying the total repair cost out of pocket.
For example, let’s say you have $650 worth of damage to your car and a $1,000 deductible. The insurance company will only pay for costs that exceed $1,000. So, you must pay the entire $650.
Deductibles often range from $100 to $2,500. Amounts vary by insurer and the type of coverage you’re purchasing. The average car insurance deductible is $500, according to American Family Insurance. If you have more than one type of coverage with a deductible, you can select different deductible amounts for each coverage type.
There’s no right choice for everyone. The deductible amount that’s best for you depends on a combination of factors, including:
When you purchase auto insurance coverage with a deductible, you typically get to choose the deductible amount. The amount that’s right for you depends on your budget, tolerance for risk, and the value of your vehicle.
If your budget includes enough of a financial cushion to cover a higher deductible, it might make sense to opt for a higher deductible to save money on your premium. If not, a lower deductible may be a good fit for you. In general, higher deductibles are usually a better option for more expensive cars, and lower deductibles are a better option for less expensive vehicles.
If you think it’s unlikely you’ll need to file a claim, you might consider a higher deductible. No matter what amount you choose, it’s important to make sure you can afford to pay it if you need to file a claim following an accident.
Deductibles apply to some types of car insurance coverage but not to others. Here are several that typically come with a deductible attached.
If an insured driver hits you, you do not need to pay a deductible since the other driver’s insurance will cover the damage. But if you ever need to file a claim with your insurance company, you will be responsible for paying the deductible. The only way to avoid paying one is by not filing a claim. But if you don’t file a claim, you will be responsible for 100% of the repair or replacement costs at a dealership or auto repair shop.

Car insurance deductible amounts vary based on the type of coverage you’re purchasing and the insurer. Common amounts range from $100 to $2,500, but different insurance companies offer different options. If you’re buying more than one type of coverage, you don’t have to select the same deductible for each type.
It depends on the type of coverage. Collision, comprehensive, uninsured motorist property damage, and personal injury protection coverage typically have a deductible. Liability, uninsured motorist bodily injury, and medical payments coverage usually don’t. Other types of add-ons you can include with your policy may also have a deductible.
If another driver is at fault in an accident, their insurance should cover injuries or physical damage you or your car sustain. But not everyone who gets behind the wheel has insurance. If an uninsured or underinsured driver hits you, the other driver’s insurer denies the claim, or the settlement process is taking too long, you may be able to file a claim with your insurer under your uninsured motorist or collision coverage. If you do, you’ll need to pay your deductible. But if you weren’t at fault, the insurance company will typically try to recover your deductible from the at-fault driver. Just keep in mind there’s no guarantee that they will.
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