What Are Auto Insurance Deductibles?

Though it can be stressful to think about, you have to be prepared for the next steps after your vehicle is damaged. When you file an auto insurance claim, you’ll usually have to pay a certain amount of money out of pocket. Much like health insurance, this out-of-pocket cost is called a deductible. As you shop for auto insurance, see why you should consider your deductible amount when you weigh the pros and cons of an insurance policy.

How Do Deductibles Work

Car insurance deductibles reflect how much a policyholder has to pay themselves to cover repairs for their vehicle. Typically, the insurer will pay the majority of the costs, but the driver will have to cover some percentage of the expenses. Regardless of whether you have comprehensive or liability coverage, your auto insurance policy will typically include a deductible of some amount when you file a claim. If the total cost of the repairs is greater than your out-of-pocket deductible, then you should contact your insurance provider and file a claim so that they can help foot the bill. However, for smaller repairs that cost less than your deductible, it makes more sense to handle the costs on your own without involving your insurer.

How Much Do You Have to Pay?

The amount you’ll pay out of pocket depends on where you live and your auto coverage. Each state regulates how it handles deductibles. Nationwide, the average deductible is about $500, but this figure can change based on your policy and range from $100 to $1,000. In many cases, you can lower your monthly premium for auto insurance coverage by increasing your deductible. You can also do the opposite and lower your deductible by paying a higher premium. However, you can’t decrease your deductible below your provider’s minimum amount.

What Happens If You’re Not At Fault?

If your vehicle is involved in an accident in which you are not the at-fault driver, you do not have to pay a deductible as long as the other driver has car insurance. Your insurance company will seek full reimbursement from the at-fault driver’s insurance company.

Insurance Lounge can help you find an affordable auto insurance policy and review the factors that impact your deductible if you ever need to file a claim. We’re a new type of insurance provider that’s fully equipped to handle questions online, in-person, or on the phone. To see how we can improve your auto insurance experience, get a free quote online today.