An insurance deductible is an amount specified in an insurance policy, by the insurance company, that the policyholder will need to pay themselves in the event that they make a claim against their insurance policy. In many cases, it may be possible to raise your deductible, in order to reduce the cost of your insurance policy or alternatively to lower your deductibles by paying higher premiums.
Free Auto Insurance Comparison
Secured with SHA-256 Encryption
UPDATED: Oct 30, 2020
It’s all about you. We want to help you make the right coverage choices.
Advertiser Disclosure: We strive to help you make confident auto insurance decisions. Comparison shopping should be easy. We are not affiliated with any one auto insurance provider and cannot guarantee quotes from any single provider.
Our insurance industry partnerships don’t influence our content. Our opinions are our own. To compare quotes from many different companies please enter your ZIP code on this page to use the free quote tool. The more quotes you compare, the more chances to save.
Editorial Guidelines: We are a free online resource for anyone interested in learning more about auto insurance. Our goal is to be an objective, third-party resource for everything auto insurance related. We update our site regularly, and all content is reviewed by auto insurance experts.
A deductible is an amount specified in an insurance policy, by the insurance company, that the policyholder will need to pay themselves in the event that they make a claim against their insurance policy.
In many ways, a deductible is similar to the co-payment on health insurance but it is normally a fixed cost per claim rather than on a sliding scale as with health claims.
What kinds of deductibles are there for auto insurance?
Your policy may have a single deductible which is applied to every aspect of your insurance policy, so for example if your deductible is $500 and your claim is for $2,000 – the insurer would in these circumstances pay out $1,500 on your claim and you would make up the remaining $500 yourself.
It is also possible for an insurance policy to offer different deductible limits against different types of claim, often this is because in cases of very low risk but high potential cost the costs of insuring the full sum might be prohibitively expensive for the customer.
If you want to know exactly what deductibles are applied to your insurance policy you must read your insurance contract and if you still don’t understand what exactly you will need to pay you should contact your insurance agent or broker for an explanation, or the insurance company direct.
Compare over 200 auto insurance companies at once!
Secured with SHA-256 Encryption
Is it possible to raise or lower my deductible?
In many cases, it may be possible to raise your deductible, in order to reduce the cost of your insurance policy or alternatively to lower your deductibles by paying higher premiums.
However you need to be careful with this, if you lower your deductible too far you won’t be getting the best value for money as the cost of your insurance may outweigh any additional benefits (or even end up costing you more than those benefits) and you’d be best off saving a little each month to cover your deductible in the event of an accident.
Conversely, it’s also important not to raise your deductible so high that you can’t afford to pay it, if and when you make a claim. In the case of third party incidents, those parties will expect to be paid off immediately by you when the insurance provider makes its payment. And in the case of your own vehicle, you might not be able to get it back on the road if you can’t find the money to pay the deductible.
(To read more about deductibles outside of our glossary, please read our more detailed article on the subject.)
Additional Deductible Definitions