This is one of the most common car insurance questions. Luckily, we know how to answer it.

A deductible is the amount you pay out-of-pocket before your insurance covers any losses.

Let’s say you get into an accident, and your deductible is $500, and you have $2,000 worth of covered damage. You would pay the $500, and your insurance would cover the rest. Typically, you pay the deductible directly to your repair shop once your car is fixed. 

How do car insurance deductibles work? 

Deductible amounts typically range anywhere from $100 to $2,000, but it depends on the policy. There’s never a wrong choice when selecting a deductible. It comes down to what you prefer. The bottom line: 

Higher deductible = Lower car insurance rate and higher out of pocket costs 
Lower deductible = Higher car insurance rate and lower out of pocket costs 

Choose an amount you’re comfortable with, but remember to consider the value of your vehicle. If your car is only worth $1,500, for instance, then it probably wouldn’t be in your best interest to choose a $1,000 deductible. Also, make sure you’re able to afford your deductible at any given time in the event of a possible accident or claim. 

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