Car Insurance Deductibles
Understanding Auto Insurance Deductibles & How They Work
Your auto insurance provides peace of mind that your insurance company will step in and help you recover if an unexpected event occurs. But it’s important to understand that, even though you’ll be getting financial support from your insurer, you’ll still be paying money out of pocket — otherwise known as a deductible.
What Is a Car Insurance Deductible?
A car insurance deductible is the amount you pay out of pocket before your insurance company covers any financial loss from a car accident. You have the ability to choose your deductible amount along with your coverage limits, and are expected to pay up to the deductible amount before your insurance company will cover any costs. This means — for example — a car accident that causes $2,000 worth of damage will only cost $500 if you chose a deductible for that amount of money. Your car insurance will cover the remaining $1,500 once your deductible is paid.What Deductible Should I Choose?
Typically, people choose an auto insurance collision deductible of $250, $500 or $1,000. Comprehensive deductibles are usually $100, $250 and $500 — although a $0 deductible is available. American Family Insurance offers auto insurance collision deductibles and comprehensive deductibles in these amounts.
Let’s talk about deductibles. What are they and why do they matter? Your car insurance is designed to protect you financially if you get in an accident. But before your insurance kicks in to pay for the covered damages, you’ll have to pay a portion of the loss. This out-of-pocket amount is called the deductible. The dollar amount of your deductible varies based on the policy you and your American Family Insurance agent select together. But all deductibles work the same. You are responsible for a pre-specified amount of money up front, and then any covered cost above and beyond that are reimbursed by your insurance. Accidents happen, and when they do, we’ll be here to help you every step of the way.
Want to learn more about how deductibles work or what deductible amount is right for you? Your American Family agent is happy to help.
Want to learn more about how deductibles work or what deductible amount is right for you? Your American Family agent is happy to help.
Deductibles With American Family Insurance
American Family Insurance makes setting up your car insurance policy and choosing a deductible easy.
- Get a quote. Before you get your deductible, you need car insurance. You can get a detailed and personalized auto insurance quote online, by contacting your agent or by phone at 1-800-MYAMFAM(1-800-692-6326).
- Have your Information ready. Be prepared by having the names, addresses, dates of birth, numbers of accidents/violation for all drivers in your household and current insurance policies at the ready when getting a quote.
- Choose your deductible. You can select a higher or lower deductible when setting up your car insurance. The deductible that’s best for you depends on your individual financial needs, so choose a deductible that works best for your budget. Continue reading for more information on high and low deductibles.
Car Insurance Deductible FAQs
Choosing Low Deductibles vs High Deductibles
Now that you know what a car insurance deductible is, you’ll need to decide if you want a low or high deductible for when you file a claim. But which one is right for you? To answer this question, it helps to understand how the price of your deductible affects your premium.
Lower Auto Insurance Deductibles | Higher Auto Insurance Deductibles |
|---|---|
Pay less out of pocket in the event you file a claim | Pay more out of pocket if you have a claim |
Pay more in premiums over a longer period of time | Premiums will be lower each month |
Pay more each month for premiums | May need to save emergency money in case of a claim to cover higher deductible |
Be able to afford paying more up front in monthly premiums. |
Still not sure what deductible makes sense for you?
Auto Deductibles: Example Scenarios
Tips for Auto Deductibles
Choose an Affordable Deductible Amount
Deciding whether to opt for a low or high deductible is unique to you. Can you afford to pay more for your premium but pay less in the event you have to file a claim? Or are you okay with paying more out of pocket when filing a claim? That’s your call, but an agent is always happy to give you their expert advice and help you choose an auto insurance deductible you’re comfortable with.Start an Emergency Fund
If you do decide to go with a high deductible, it would be in your best interest to tuck away some savings each month in case you end up having to pay for damages out of pocket. It’s all about being proactive about your protection!At the end of the day, part of choosing a deductible for your car insurance policy is ensuring it’s designed to fit what you’re comfortable with. Talk with your American Family Insurance agent about finding the right range, and don’t be afraid to ask questions! We’re here to help make the process easier, affordable and personalized just for you.
Find the Right Car Insurance Deductible for You.
Get a quote and an agent will be ready to help you choose your deductible!
The information on this webpage represents only a brief description of coverages, is not part of your policy, and is not a promise or guarantee of coverage. If there is any conflict between this information and your policy, the provisions of the policy will prevail. Insurance policy terms and conditions may apply. Coverage features and limits vary by state and may be subject to change. Some products are not available in every state. Discount availability and eligibility vary by state and policy terms. (Discounts apply to auto and property policies.) Please check with your agent and read the policy for exact details on coverages and exclusions.