Is it a bad idea to have a high deductible on your auto insurance?

High deductibles on your auto insurance can lower your monthly rates by 7%. However, insurance rates vary for each person. Although lower deductibles produce more expensive rates, you'll get more car insurance coverage. You can even get a waiver for high deductibles on your car insurance in some situations. Shop around and compare multiple companies to secure affordable car insurance with high deductibles.

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Chris Tepedino is a feature writer that has written extensively about auto insurance for numerous websites. He has a college degree in communication from the University of Tennessee and has experience reporting, researching investigative pieces, and crafting detailed, data-driven features. His works have been featured on CB Blog Nation, Flow Words, Healing Law, WIBW Kansas, and ...

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Written by Chris Tepedino
Insurance Feature Writer Chris Tepedino

Rachael Brennan has been working in the insurance industry since 2006 when she began working as a licensed insurance representative for 21st Century Insurance, during which time she earned her Property and Casualty license in all 50 states. After several years she expanded her insurance expertise, earning her license in Health and AD&D insurance as well. She has worked for small health in...

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Reviewed by Rachael Brennan
Licensed Insurance Agent Rachael Brennan

UPDATED: Aug 26, 2021

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Can't-Miss Facts

  • High deductibles lower auto insurance rates
  • Collision and comprehensive insurance have deductibles
  • The most common deductibles are between $250 and $2,000

Did you know you have to pay a deductible before an auto insurance company gives you a claim check? Deductibles are required for specific coverage options.

But is it a bad idea to have a high deductible on your car insurance? Don’t worry — our guide explains everything you need to know about high deductibles and how to get affordable auto insurance rates.

After you learn more about if it is bad to have a high deductible on car insurance, enter your ZIP code in the free online quote tool above to compare rates from multiple companies in your area.

Is it bad to have a high deductible on car insurance?

It depends on your situation. A high deductible can save you at least 7% on car insurance if you’re on a budget.

But what is a deductible for car insurance? Deductibles are deposits you make before an auto insurance company pays out a claim check.

However, high deductibles are serious hurdles when you want to file a claim.

For example, say an at-fault accident left you with a $4,000 repair bill. Your collision insurance can cover it, but you have to pay a $2,000 deductible. That means your insurance is really only covering $2,000.

So when do you pay the deductible for car insurance?

Your auto insurance company won’t cover the cost of damages until you pay the deductible.

There are a few ways around this, though. Continue reading to learn what you can do about high deductibles.

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Do I have to pay an auto insurance deductible?

In most cases, you’ll have to pay your deductible before a claim check is issued.

Some car insurance companies take the cost of your deductible from your claim. However, that affects your vehicle’s repair bill.

But you can use perks that will help you bypass the deductible. Here’s a list of benefits that can reduce or cover your deductible.

  • Vanishing deductible
  • Deductible savings
  • Deductible waiver

Deductible savings allow you to pay extra for auto insurance each month. Part of your monthly payment goes to car insurance, and the other portion goes to a deductible savings account.

Vanishing deductibles give you at least $50 off your deductible each year that you don’t file a claim.

Finally, the deductible waiver is a free pass for collision or comprehensive claims. You can buy deductible waivers, but you should check to see if you qualify for one.

For example, a California Department of Insurance ordinance says that auto insurance companies must provide a deductible waiver for drivers who were in an accident with an uninsured or underinsured driver.

What are the average auto insurance deductibles?

The two types of deductibles you should be aware of are collision and comprehensive deductibles.

Each coverage option has a minimum deductible of $250 and a maximum deductible of $2,000.

Higher deductibles can lower premiums for car insurance. But lower deductibles can provide more coverage.

Some auto insurance companies may provide deductible waivers. You will have to check with your insurance company to find out about eligibility.

Why are auto insurance coverage limits important?

Deductibles give you access to your claim check. If you don’t have enough on your coverage limits, you could face more out-of-pocket costs.

The minimum car insurance requirement covers about $25,000 for bodily injury of one person, $50,000 for bodily injury of multiple people, and $25,000 for property damage (also labeled as 25/50/25).

We recommend a medium or medium-high coverage limit, such as 50/100/50 or 100/300/100.

It’s more expensive than the minimum, but it saves you from unexpected expenses. And it prevents costs from stacking up with high deductibles.

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Higher Deductible on Your Auto Insurance: The Bottom Line

A higher deductible isn’t bad for your budget, but it can impact your out-of-pocket expenses. If you have perks like vanishing deductible and deductible savings, you can get by with a high deductible.

Compare auto insurance companies to see what options are available for deductibles.

Now that you know more about high deductibles on your auto insurance, use our free online quote tool to compare the top insurance companies near you.

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