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What is a car insurance deductible and how does it work?

The Rundown
  • Drivers must pay their deductibles to gain access to their collision and comprehensive coverages
  • Drivers can increase their deductibles to decrease their rates
  • You can shop online to find less expensive car insurance

Deer make their homes all across the Lone Star State. You should (and most likely do) have deer auto insurance in Texas

If you were to hit a deer while driving, you would have what you need to get your car fixed with this coverage. However, this is where things get tricky.

Many drivers are shocked to hear that they need to pay a sum of money first before they can access any financial assistance from their insurance company. This isn’t illegal. You simply have an insurance deductible.

A car insurance deductible is the amount of money you must pay to the insurance company before you receive the money you need to have repair your vehicle.

No one likes surprises when it comes to paying money. So, it’s always best to know how your car insurance deductible affects car insurance quotes and when you’ll have to pay your deductible.

Next time you’re faced with questions like, “What is my deductible?” or “What does deductible mean in car insurance?” you’ll know just how to answer them.

If you’re not happy with your car insurance deductible, enter your ZIP code to get free quotes from insurance companies in your city.

What is a deductible in car insurance?

Your deductible is one of the easier-to-understand aspects of your insurance policy, unlike some other Texas car insurance requirements.

A car insurance deductible is simply the dollar amount that you are required to pay when filing a claim before your insurance company will cover the remaining cost.

Luckily, there are only two coverage types that will require you to pay a deductible when you need to use them. If you were to file a (1) collision or (2) comprehensive claim, you must be prepared to pay.

This gets a lot of drivers thinking, “How does a car insurance deductible work?” Well, the best way to answer that is through an example.

Let’s say that you took your car out to run an errand, but then you backed into a lamp post when leaving your parking space.

The lamp post took no damage. However, the trunk of your car suffered a rather large dent. After getting your car into a mechanic’s shop, you learn that it will cost you $800 to get your car looking brand new again.

Once you take a look at your car insurance policy documents, you see that your collision deductible is set at $500. This means that you would have to pay that much first before the remaining $300 would be covered by your insurance company. 

Now, before you hop on the phone with the insurance company, you may want to reconsider if filing a collision claim in this particular scenario is really the best step.

If you face a $2,000 fix, paying your $500 is common sense. However, in situations like this one, the balance after paying your deductible is rather low, and filing a claim may not be worth it in the long run. 

Remember, filing claims can increase your insurance rates over time. So, it is always best to see how much you can afford to pay on your own before filing a claim.

Can drivers choose their deductibles?

Since your deductible could be the only thing standing between you and a repaired vehicle, it’s important to have an affordable car insurance deductible.

You’ll be happy to hear that you do have some flexibility when it comes to choosing your deductible. Drivers usually have three choices when it comes to deductibles, but you must be very careful when picking yours.

When calculating your car insurance rates, your car insurance deductible is quite important.

The relationship between your deductible and your insurance rates is like a see-saw. If your deductible is low, your rate will be high. But if your deductible is high, your rates will decrease.

You can typically choose to have your deductible set at:

  • $250
  • $500
  • $1000

On average, most drivers set their deductible to $500.

Of course, when you are shopping for car insurance online, you’ll be able to take your time and adjust the deductibles to see if you could afford to even purchase a $0 deductible for your policy.

Bear in mind, though, that $0 deductibles may not be available for every driver. Even if it is available, it could make your overall rates quite high.

How can drivers keep insurance rates low?

Thankfully, you don’t have to resort to hiking your deductibles to get more affordable Texas car insurance rates. Insurance companies typically offer a wide variety of discounts that you can take advantag/e of to keep your rates low.

Common discounts like these can help you obtain cheaper rates without raising your deductibles to unsustainable levels:

  • Good student discount
  • Defensive driver discount
  • Multi-car discount
  • Multi-policy discount
  • Anti-theft device discount
  • New car discount
  • Safe driver discount
  • Paperless billing discount
  • Automatic payments discount

When you make use of everything your insurance policy has to offer you, you’ll see just how much more control over your policy than you think you do.

Of course, in some situations, you may not even need to rely on your insurance policy at all to get your vehicle fixed.

Who pays a deductible after an accident?

If you were driving down the street, following all the rules of the road when you were rear-ended, you would not have to pay your collision deductible. Seeing as you did not cause the accident, you would be considered not to be at fault.

In this situation, you would be able to contact the other driver’s insurance company and file a claim. Not only does this not go on your record as one of your claims, but you also could expect a check from the other driver’s insurance company for repairs.

On the other hand, the at-fault driver would have to pay their deductible to get their car repaired if it took any damage from the accident.

So remember, who pays a deductible after an accident is an at-fault driver. If you were hit by a car and it wasn’t your fault, do not file a claim with your insurance company. Instead, contact the at-fault driver’s insurance company so you can get the vehicle repairs you need without ever glancing at your deductible.

Your Car Insurance Deductible Explained: What You Need to Know

If you were to ask a car insurance company, “What car insurance deductible is appropriate for me?” you would most likely be advised to choose one that you can afford to pay if you need it.

This leads to another question: When do you pay the deductible for car insurance?

You will need to be prepared to pay your deductible if you are in a collision or have experienced a comprehensive loss.

In order to avoid being trapped with a high car insurance deductible, buy car insurance from a company that can offer you low rates from the get-go.

It’s true that a higher car insurance deductible reduces your car insurance rates, but you shouldn’t set your deductibles at such a high level that would make it impossible for you to pay it.

There are other ways for you to keep your rates low. Review your policy at every renewal to make sure it isn’t outdated and that you apply for every discount you qualify for.

Now that you know what a deductible is and how to use it, enter your ZIP code to get free car insurance quotes and see how you can score a low car insurance deductible today.

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