Car insurance deductibles explained

Last updated: November 12, 2026

Your deductible is the amount you pay toward a claim before your insurance pays the rest. If you have a $500 deductible and $3,000 of covered damage, you pay $500 and your insurer pays $2,500.

Which coverages have a deductible?

Collision and comprehensive almost always do, and they can be set to different amounts. Liability coverage, which pays for damage you cause to others, doesn't have a deductible. Some states also use deductibles for personal injury protection.

Higher deductible, lower premium

Raising your deductible usually lowers your premium, because you're taking on more of the cost of small claims. Going from $250 or $500 to $1,000 is a common way to save.

How to choose

• Pick an amount you could pay tomorrow. If a $1,000 bill would be a crisis, a lower deductible is safer.
• Do the math. Compare the yearly savings with the extra you'd pay out of pocket. If you save $150 a year by raising your deductible by $500, it pays off if you go more than about three years between claims.
• Check your lender's rules. If you have a loan or lease, your lender may cap how high your deductible can be.

Do you pay the deductible if it's not your fault?

If the other driver's insurance pays for your damage, you usually don't pay a deductible. If you use your own collision coverage to get repairs moving faster, you may pay it up front and get it back if your insurer recovers the money from the other driver's company.

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