Question 1

What is an insurance deductible?

Accepted Answer

An insurance deductible is the amount you pay out of pocket before your insurance coverage kicks in after a claim. For example, if you have a $500 deductible and $3,000 in damage, you pay $500 and insurance pays $2,500. Higher deductibles lower your premium but increase your out-of-pocket risk per claim.

Question 2

Should I choose a higher deductible to save money?

Accepted Answer

It depends on your financial situation and how often you file claims. A higher deductible ($1,000 or $2,000) saves 10-25% on premiums but means you pay more per claim. If you rarely file claims and have an emergency fund that covers the deductible, a higher deductible is usually the better financial choice.

Question 3

How much does raising my deductible save on premiums?

Accepted Answer

Going from a $250 to a $500 deductible typically saves about 8-12% on collision and comprehensive premiums. Moving from $500 to $1,000 saves another 10-15%. From $1,000 to $2,000 saves roughly 8-10% more. The exact savings depend on your insurer and other rating factors.

Question 4

How many claims does it take to break even with a lower deductible?

Accepted Answer

With a $500 deductible versus a $1,000 deductible, you typically save $200-$300 per year in premiums with the higher option. Since each claim costs you $500 more, you would need to file about 1-2 claims per year for the lower deductible to be worth it. Most drivers file a claim only once every 10+ years.

Question 5

Can I have different deductibles for collision and comprehensive?

Accepted Answer

Yes. Many insurers let you set separate deductibles for collision and comprehensive coverage. A common strategy is to keep a lower comprehensive deductible ($100-$250) since comprehensive claims like windshield damage are more common, while setting a higher collision deductible ($1,000) for the bigger premium savings.

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