An auto insurance deductible is the amount that you pay out of pocket for damages to your vehicle before your auto insurance company covers any accident-related expenses. Different auto insurance companies offer different deductibles, which customers select when they’re signing up for an auto insurance policy. Depending on the insurer, deductibles may be as low as $0 or as high as $2,500 or more. A $500 deductible seems to be a very average deductible many people select.

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Understanding Your Auto Insurance Deductible

It’s important to note that deductibles are charged on a per-claim basis. If your vehicle is vandalized and then, on your way to the body shop, you are in a collision, those would be filed as two separate claims and would, therefore, have two separate deductibles.

Generally speaking, deductibles are only applicable to collision coverage and comprehensive coverage. Collision coverage pays out if you’re responsible for a collision, comprehensive coverage pays to repair damage from fallen tree limbs, vandalism, fire, theft, and other covered losses that are not accident-related. Liability coverage, which pays for bodily injury damages that you may cause if you are found responsible for a collision, generally does not have a deductible.

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How the Auto Insurance Deductible Works

In the event of a loss that is covered by your policy, you file a claim and then your auto insurance company cuts either you or the repair shop a check to cover the damages. However, your deductible is first applied to damages. After that deductible is met, your insurer pays the remaining amount.

For example, say that you have a $750 deductible and you are in a collision that results in $3,000 in damages. After a claim has been filed and your insurer has determined what repairs are needed to bring your vehicle back to pre-accident condition, you’ll pay your deductible and your policy will cover the rest. In this scenario, you would pay your $750 deductible, and your auto insurance company would cover the remaining $2,250.

Choosing the Right Auto Insurance Deductible

When your auto insurance agent is helping you build your auto insurance policy, it’s often tempting to focus on the monthly premium and skimp on coverage to keep that rate as low as possible. However, this approach can backfire when you actually need to file a claim.

Car accidents can happen in the blink of an eye, and whatever your deductible is, you should be able to pay out that amount at any given time. Sure, a $2,500 deductible may result in a lower monthly payment, but if you couldn’t pay out that $2,500 for an unexpected repair tomorrow, then your collision or comprehensive coverage may be virtually useless to you.

To keep your rate low, choose the highest deductible that you could comfortably afford.

Nevada Insurance Enrollment Is Here to Help You Choose the Right Deductible

Some drivers choose high deductibles in exchange for a more affordable monthly premium, while other drivers prefer a lower deductible with a higher monthly premium. Your Nevada Insurance Enrollment auto insurance agent can help you review your insurance needs, claims history, and budget, to help you find the right balance between affordability and quality coverage.

Related Articles:

Auto Insurance | What is a Deductible?

Auto Insurance: Collision and Comprehensive Deductible

Understanding Your Auto Insurance Policy

Will my Auto Insurance premium increase if I file a claim?

At Fault – If YOU Caused an Auto Accident

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DISCLAIMER: It is important to note that the information contained herein is made general for the purpose of explanation.  You should consult your policy for exclusions or other language that may alter your policy.

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