Chelsey Tucker graduated with a Bachelor of History degree from Metropolitan State University in 2019. She now writes about insurance with her specialty being life insurance and has been quoted on Help Smart Phone and MEL Magazine.

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Dan Walker graduated with a BS in Administrative Management in 2005 and has been working in his family’s insurance agency, FCI Agency, for 15 years. He is licensed as an agent to write property and casualty insurance, including home, auto, umbrella, and dwelling fire insurance. He’s also been featured on sites like Reviews.com.

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Reviewed by Daniel Walker
Licensed Auto Insurance Agent

UPDATED: Mar 19, 2020

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Here's what you need to know...

  • When you elect to carry physical damage coverage on your auto insurance policy, you must choose a deductible
  • A deductible is the portion of the loss that you must pay for. For your insurer to pay for your loss, the damage must exceed your deductible
  • When you file a comprehensive or a collision claim, the adjuster will review your coverage and estimate how much it will cost to repair your car. If the deductible is exceeded, it will be deducted from your settlement and the remainder of the repairs will be paid for
  • Comprehensive claims are subject to a deductible almost all the time. Some carriers will waive your comprehensive deductible when you’re filing a claim for windshield chip repair
  • When you have a collision loss, you only pay your deductible when you’re at-fault or when you can’t identify the other driver involved

Not all insurance policies come with deductibles. If you’re buying a basic auto insurance policy, you don’t have to worry about researching deductibles or choosing the right option.

It’s not until you add physical damage coverage on your policy that you need to start worrying about deductibles and how they work.

The deductible that you choose doesn’t only dictate how much you have to pay when you file a claim, it also has an effect on your policy premiums. It’s critical you take the time to customize your policy to suit your family’s needs.

You can start this process by entering your zip code into our FREE comparison tool above!

What is a deductible?

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A deductible is a specified amount of money that will be deducted from your loss settlement when you file a claim for a specific type of coverage.

In terms of auto insurance, policyholders must choose a deductible for their comprehensive coverage and their collision coverage. The amount selected is the amount the name insured is willing to pay towards the cost of repair when their vehicle is damaged.

Every company offers a different combination of deductibles. When you carry full coverage, it’s your job to select one deductible for your non-collision losses filed under comprehensive and one for your collision losses. Typically, policyholders will carry lower deductibles for comprehensive than they carry for collision. Deductibles could range from $50 to $2,000.

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How will the deductible that you select affect your insurance costs?

It wouldn’t be hard to choose a deductible if every deductible carried the same premium. What makes building your policy so difficult is deciding which deductible makes the mot sense.

Since deductibles have a direct effect on how much an insurance company could pay out for claims, you should compare different options to see which is best.

The higher your deductible, the lower your premiums for that coverage. Choosing higher collision deductible will more than likely have more of an effect on bringing your rates down. Mature drivers with clean driving records will see less of a difference when raising their deductibles. Here’s how much you could save off of your premium:

  • Raising your deductible from $250 to $500 will save you seven percent
  • Raising your deductible from $500 to $1000 could save you nine percent
  • Raising your deductible from $500 to $2000 could save you 16 percent

How are you charged a deductible?

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When you file a claim for damages, the portion that you’re responsible for paying will be applied to the repair costs first. Some companies require that their policyholders pay their deductible to the repair shop before the work is started. Other companies will give the go-ahead for their partner shops to start the work.

If you aren’t required to pay your deductible right away, the company will deduct it from your settlement check. You will be expected to pay the remainder of the balance due to the shop before you get your car back. There may be some cases where you’ll receive the deductible that you paid back once the claim has been fully investigated.

When do you pay your comprehensive deductible?

Comprehensive coverage protects you against many different non-collision losses. Some of the many perils that are covered under comprehensive include fire, theft, vandalism, explosion, flood, falling objects, glass breakage, and contact with a live animal. Many people call these non-fault losses.

In almost all situations, you’re required under the terms of your policy to pay your comprehensive deductible if you’re filing a covered claim.

The damage must exceed this amount for your coverage to take effect. In some cases, there are different rules when you’re filing a glass claim.

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Deductibles for Glass Damage

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If your windshield is cracked, getting to the glass repair shop early could pay off. Many companies want to avoid paying for an entire windshield replacement and these companies offer a deductible waiver when the crack can be repaired. If the chip is small enough to be sealed with a special resin, you don’t have to fork out hundreds of dollars.

When do you pay a collision deductible?

Collision coverage protects you if your car is damaged while you’re driving it. In most cases, the deductible is charged when you’re at least 51 percent at fault for the loss. If both parties are equally at fault in the loss, most companies will charge their clients the deductible, but not in all states.

If you’re not to blame for the actions that led up to the accident, you will file a third-party physical damage claim against the at-fault driver’s insurance, which is a bit more complicated because the insurer must agree you were not at fault before they will pay for the damages.

If you want your damages paid for while the claim investigations are delayed, you need to file a claim against your policy.

Your insurer will pay out for the collision loss, and you will be charged your deductible. If the insurer can recoup the amount from the other carrier through subrogation, you will get your deductible back.

Now that you know how deductibles work, it’s time to decide which deductible works for you. Make sure you verify that the value of your car is high enough before you select full coverage.

Compare premiums for different deductibles by using our FREE online rate comparison tool below then choose the best policy.