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November 07, 20232 min read

What Does Deductible Insurance Mean for Car Owners?

When purchasing a car, auto insurance is a must-have. It’s typical to think of the insurance company to settle for, the coverage you want, and the amount of insurance to pay. What might not be apparent is the car insurance deductible and what that means for your pocket.

Read on for more details about how car insurance deductibles work. Below, we’ll dissect what deductible means in a car insurance policy and what different deductible amounts indicate.

Car Insurance Deductible Defined

It refers to the amount of money you’ll have to pay when you make an insurance claim. Insurance providers generally use this to reduce the risk involving the insured party, in this case, you. That means you’ll have to pay your deductibles out-of-pocket to cover part of vehicle repairs before your insurer covers the remaining amount.

So, if after a car accident your vehicle gets damaged and repairs are approximately $3,000, a $500 deductible means your insurance company will cover $2,500 once you pay the $500. While not all policies need deductibles, it’s ordinarily included with these types of coverage:

  • Collision
  • Comprehensive
  • Underinsured/Uninsured motorist property damage
  • Personal injury protection

How Car Insurance Deductibles Work

Auto insurance deductibles will work the same way regardless of your coverage. Policyholders must pay a portion of the claim each time they seek reimbursement. That means if you make multiple claims in a particular year, you will pay a deductible with each claim, no matter the type of coverage.

Unlike health insurance, where you must meet annual deductibles, auto insurance doesn’t have yearly deductibles. You’ll only be responsible for the deductible you agreed on when you file a claim. And once you kick in your car insurance deductible, your insurer pays the remaining repair or vehicle replacement costs.

High Versus Low Auto Insurance Deductibles

You can freely decide whether you want a higher or lower deductible amount for your auto insurance policy. Most people settle on an affordable amount depending on their current financial situation. But for others, having a higher deductible makes more sense.

A high deductible means lower premiums, whereas a low deductible means higher premiums. So, think this through before deciding on an amount. It’s best to go with an amount you’re most comfortable with, but more importantly, one you can afford to pay when making a claim.

When Is Deductible Amount Not Required?

You won’t need to pay a car insurance deductible if:

  • Someone files damage or injury claims against your liability coverage
  • An insured at-fault driver hits you
  • A disappearing deductible lowers the amount to zero
  • Your insurer offers, and you go for, free repairs on glass/windshield

FFUN Cars is your go-to companion for all things cars. We’re here for you, whether you want a new car or need answers to vehicle FAQs such as auto insurance deductibles. Don’t hesitate to visit our dealership in Saskatoon or Prince Albert or contact us to speak to our friendly service techs.


Kasandra Martell

Written by Kasandra Martell

Kasandra is a marketing expert with a specialization in content development. With experience in multiple industries, she provides factual, entertaining, and engaging content for the automotive industry.