Home » What Is an Auto Insurance Deductible? 
April 23, 2024

What Is an Auto Insurance Deductible? 

man in blue suit standing beside black car with auto insurance deductible

Auto insurance deductible is a fundamental protection for any driver and is a requirement in most states. Understanding your auto insurance policy, including your financial responsibility, can make all the difference when it comes time to file a claim.

What Can Auto Insurance Cover?

Personal auto insurance is designed to help cover you financially in the event of an accident or other incident involving your vehicle. Depending on selected coverage, your policy may insure you against physical damage to your car and liability risks for damage you cause to others.

What Is a Deductible?

If you have physical damage protection for your vehicle, such as collision or comprehensive coverage, you likely also have a deductible. A deductible is the amount you’re responsible for paying before your insurance policy kicks in. In most cases, you must pay your deductible each time you submit a relevant claim.

For instance, say you get into an accident and have a $3,000 repair bill. Assuming the repairs are covered under your policy, your insurance company may compensate or reimburse you for repairs up to the policy’s limits, minus your deductible. In this example, if your deductible is $1,000, the insurer would pay $2,000 for the claim.

Additionally, it’s worth noting that liability claims (i.e., instances where you cause damage to others) typically do not have a deductible associated, and insurance may cover such situations right away.

How Do Deductibles Affect Premium Costs?

A deductible is the amount you agree to pay for a covered incident before your insurance kicks in. Conversely, a premium is the amount you regularly pay (i.e., monthly) for your auto insurance policy overall.

Deductible limits and premiums can influence one another. Generally, if you opt for a higher deductible, your premium cost can be lower; if you have a higher premium, your deductible cost can be lower. If you want to reduce your regular premium payments, consider raising your deductible. Remember that this is the price you agree to pay before insurance covers damages. So be sure the deductible you select is affordable.

How Do I Know Which Auto Policy to Get?

Your Strawn & Co agent can help assess your circumstances and recommend coverage. We have the expertise to suggest the right coverage level for your needs. Whether it’s shopping for coverage or adjusting deductible and premium levels, we can help guide you through the auto insurance process with ease. Reach out to Strawn & Co today to get started.

This blog is intended for informational and educational use only. It is not exhaustive and should not be construed as legal advice. Please contact your insurance professional for further information.

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