How Do Car Insurance Deductibles Work?

how car insurance deductibles work

How Do Car Insurance Deductibles Work?

A car insurance deductible is something that you pay to repair your car if you have an accident or you need to make a claim. Unlike with health insurance, you don’t have to meet your annual deductible, you just have to pay your deductible with most claims. It doesn’t matter how many deductibles you have per year or how long your policy lasts for, it’s something that you must pay if you want your car repaired. When you’re looking into auto insurance Wilmington, NC, you need to ensure that you are looking into both comprehensive and collision. This is because these are the two most common coverages that include deductibles as an option. Some people have deductibles for personal injury protection in some cases, and deductibles have the same process for all coverages.

How To Choose The Right Deductible

The cost of a deductible can vary from a low $500 right up to $2,000. A lot of drivers choose to go for the lower option, because they want to pay as little as possible for car repairs. To know which deductible you want to get, you have to ask yourself a few questions. The first, is how much you want to pay for your car to be repaired. The higher the deductible, the lower the car insurance rate but the higher the out of pocket expenses. The lower the deductible, the higher the car insurance costs and the lower your out of pocket expenses are.

You should always go for affordability with your deductible, so work out what you can pay out of pocket and don’t choose your deductible to be higher than that figure. It’s a gamble to go low on the premise that an accident ‘may never happen’ to you, so play it safe with your deductible choice and go for the higher amount you can afford to pay. If you’ve had accidents previously, there’s every chance you could again so it’s always better to err on the side of caution.

Your deductible is only applicable to damages that are done to your car. If your insurance company pays up for your repairs, then you must pay the deductible. It’s a simply rule: if they pay, so do you.

There are, however, a couple of common situations where you wouldn’t have to pay for your deductible. If the other drive has hit you and is deemed to be the one at fault, it’s their insurance company that should pay for the repairs, so you won’t have to pay your deductible. If you’re both at fault, you both share the cost and pay for some of your deductible – but not all of it. The other situation is if you choose not to repair the car. It’s unusual, but if he repairs are going to cost you more than the car’s value, you could choose not to repair it. In this case, your insurer will cut you a check for the repairs.

Please contact our office so we can help guide you through the best possible insurance options.


Welcome to my first posting. There is so much information out there today about insurance – from companies promoting for cheap cheap cheap, to quality.  My intention with blogging is hoping to help educate you in understanding your everyday exposures.  Insurance is not all that fun, not all that exciting, but necessary.  Yes you are paying for something you don’t see until that day when something happens.  And I hope that day never happens for you, but if it does, I hope you are correctly insured.

So to start my first post, like I said there is so much to talk about and so many options.  I have an upcoming event I am volunteering for which brings to light teens and driving. So, I think I will focus on that this time.

Allstate Insurance has done tons of research over the last 10 years about teen drivers and their exposure.  They get behind the wheel of a huge piece of metal, not exactly aware of the lethal weapon they just jumped into.  I remember my first day of driving and all the excitement.  You aren’t thinking about all the risk, all the exposures for you or your parents.  You just want to be the cool one and drive.  At 16, you know everything, right?!

I have teamed up with the local division of StreetSafeUS.  They are a non-profit organization where everyone is a volunteer.  This is to show students the risks that are out there the minute they jump behind the wheel of the lethal weapon.  It’s not your everyday driving school type learning environment.  They have real live people come and share their experiences.  Parents that have lost children in driving accidents, others that have caused accidents, and taking the lives of others.  And, then there is the insurance exposure that most of the teenagers and parents are not aware of.  Your limits of liability only pay up to what you have on your policy.  After that, it’s up to you as the policyholder.  You could lose more than money: your home, your savings, retirement and income are exposed.  So, that is why I decided to partner with StreetSafeUS.  To help make our streets safer, our drivers more knowledgeable about what is at risk.  When you have the time to, check out their website at  

Here’s some statistics to leave you with:

  • Car crashes are the #1 killer of teens in America2
  • Parents are the #1 influence of teen drivers1
  • 84% of parents and 79% of teens admit to speeding1
  • More parents than teens use their phones while driving1
  • About ½ of teens will likely crash before graduating high school3
  • Teens are 4x more likely to be killed in a car crash with 3+ friends in the car4
  • 69% of teens think they should have more practice before getting a license1
  • 61% of teen passengers killed in a car crash weren’t wearing a seat belt2
  • 6PM to Midnight is the most deadly time for teens on the road2



1  The Allstate Foundation’s 2015 Driving Change Report
2 Insurance Institute for Highway Safety 2013 Teen Fatality Facts
3 National Safety Council
4 Tefft, Brain C., Allan F. Williams, and Juerk G. Grabowski. “Teen Driver Risk in Relation to Age & Number of Passengers.” (2012): 1. Print