What Is a Car Insurance Deductible?
Definition
A deductible is the amount of money that you are required to pay out of pocket before your expenses are paid on a claim.
Example:
If you are in an accident and you have:
$3,000 of damage to your vehicle.
$500 deductible.
You will pay $500. Your car insurance company will pay the remaining $2,500.
When you have an accident, your car insurance company will pay for damages up to the limit of your policy. Regardless of how serious how the accident is, you will only need to pay your auto deductible.
NOTE: Keep in mind deductibles do not apply to liability auto insurance coverage, as that pays for damages incurred by another driver when you cause an accident. Rather, it would apply to coverage types that pay your damages, such as collision or comprehensive coverage.
About Deductibles
Your deductible will vary according to:
The terms of your policy.
Your premium.
You can occasionally find policies with no deductible, but the auto insurance premiums are significantly higher for this type of coverage. In general, the higher your deductible, the lower your premium.
