When to Use Your Deductible
When to use your deductible depends on your deductible amount. With a $250, $500, or $1,000 deductible, the financial decision should be clear: $1,800 due to higher rates over the next three years plus the immediate cost of your deductible will likely cost more than paying $2,000 or less out of pocket right now. This guide will walk you through different situations in which you should use your deductible.
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Jimmy McMillan
Licensed Insurance Agent
Jimmy McMillan is an entrepreneur and the founder of HeartLifeInsurance.com, an independent insurance brokerage. His company specializes in insurance for people with heart problems. He knows personally how difficult it is to secure health and life insurance after a heart attack. Jimmy is a licensed insurance agent from coast to coast who has been featured on ValientCEO and the podcast Modern Li...
UPDATED: Jul 25, 2025
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Editorial Guidelines: We are a free online resource for anyone interested in learning more about car insurance. Our goal is to be an objective, third-party resource for everything car insurance related. We update our site regularly, and all content is reviewed by car insurance experts.
UPDATED: Jul 25, 2025
It’s all about you. We want to help you make the right coverage choices.
Advertiser Disclosure: We strive to help you make confident car insurance decisions. Comparison shopping should be easy. We are not affiliated with any one car insurance company and cannot guarantee quotes from any single provider.
Our insurance industry partnerships don’t influence our content. Our opinions are our own. To compare quotes from many different companies please enter your ZIP code on this page to use the free quote tool. The more quotes you compare, the more chances to save.
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In nearly all claims with your own insurance company, you’ll be obligated to pay your auto insurance deductibles, which represents your financial contribution towards a claim. The question, “Should I use my deductible for this accident?” goes in hand in hand with the question, “Should I file a claim?” The answer to those questions will be different for each driver depending on one’s insurance coverage, budget, accident history, and the amount of one’s deductible. Generally speaking, filing a claim will likely cause your rates to increase, so keep in mind the long-term cost of your monthly premiums.*
When filing a claim for an at-fault accident, you might see your rates increase by as much as $50 or even $100 in your monthly premium. At $50 more per month, you’ll be looking at a $600 per year increase in your insurance costs. Most insurers will lower a driver’s rates if they make it for three years without an accident or a claim, so you could expect roughly $1,800 in increased insurance costs until your rates come back down.
With a $250, $500, or $1,000 deductible, the financial decision should be clear: $1,800 due to higher rates over the next three years plus the immediate cost of your deductible will likely cost more than paying $2,000 or less out of pocket right now. Added to the equation is the potential for even higher rates in the event of another accident before three years has passed.
A deductible only applies to certain insurance coverage options. Keep in mind that this doesn’t apply if you only have liability coverage, as that only covers damage to another vehicle. The liability coverage covers you for the damage you cause to other people or their property. If you’re at fault, the liability insurance would pay for the bodily injury and property damage up to the coverage limit.
For any given scenario, there are a few determining factors that can help you decide whether or not to file a claim or handle it without your insurer. Following are a handful of scenarios with some tips on how to choose whether or not to use your deductible.
Choosing the Right Car Insurance Deductible
When selecting an auto insurance policy, understanding the implications of different deductible amounts is crucial. This guide will help you navigate through various deductible options and make an informed decision.
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Understanding Deductible Options
$250 car insurance deductible
A $250 deductible is the lowest amount you might choose. This option means you will pay $250 out-of-pocket for any claim before your insurance covers the rest. It’s beneficial if you prefer lower upfront costs in case of an accident, but it typically comes with higher monthly premiums.
Meaning of $500 Deductible in Car Insurance
A $500 deductible is a common choice among drivers. With a $500 collision deductible, you are responsible for the first $500 of any repair costs in an accident. This deductible strikes a balance between manageable out-of-pocket expenses and reasonable monthly premiums.
$500 vs $1,000 Deductible
Choosing between a $500 or $1,000 deductible can significantly affect your insurance premiums and out-of-pocket costs. A $500 deductible car insurance policy usually has higher premiums than a $1,000 deductible auto insurance policy, but the latter will require you to pay more upfront if you need to file a claim.
Car Insurance with a $1,000 Deductible
Opting for car insurance with a $1,000 deductible generally lowers your monthly premiums. However, in the event of an accident, you will need to pay $1,000 before your insurance covers the remaining repair costs.
High Deductible Options
$1,500 car insurance deductible
A $1,500 car insurance deductible policy significantly reduces your monthly premiums but increases your financial responsibility in the event of a claim. This option is suitable for drivers who can afford higher out-of-pocket expenses.
$2,000 car insurance deductible
With a $2,000 deductible, your monthly premiums are likely to be the lowest. However, this high deductible means you will pay $2,000 out-of-pocket before your insurance kicks in, making it crucial to have sufficient savings to cover potential claims.
Auto Insurance Deductible Recommendations
When choosing an auto insurance deductible, consider both your financial situation and out-of-pocket costs. A lower deductible, such as $500, provides manageable expenses when filing a claim but results in higher premiums. Higher deductibles lower monthly premiums but increase out-of-pocket costs. Cosmetic car insurance can cover minor damages like small scratches or dents without significantly affecting your premiums.
Auto Insurance Deductible: $500 or $1,000
Deciding between a $500 or $1,000 deductible depends on your financial situation and risk tolerance. If you prefer lower monthly premiums and can afford higher upfront costs, a $1,000 deductible might be suitable. Conversely, a $500 deductible is ideal if you want to minimize out-of-pocket expenses in case of an accident.
Auto Insurance Deductible Per Claim
Your auto insurance deductible applies per claim, meaning you must pay the deductible amount each time you file a claim. This is an important factor to consider, especially if you anticipate needing to file multiple claims.
Auto Insurance with a $500 Deductible
Choosing auto insurance with a $500 deductible is a common middle-ground option that balances reasonable monthly premiums with manageable out-of-pocket expenses.
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Making the Best Choice
When selecting your car insurance deductible, consider your financial situation, driving habits, and risk tolerance. For some, a lower deductible offers peace of mind and manageable costs in the event of a claim, while others may prefer higher deductibles to benefit from lower monthly premiums. Evaluate your needs carefully to choose the best deductible for your auto insurance policy.
For those looking for a balance, “Cheap car insurance with a $500 deductible” can provide an affordable option while still maintaining a reasonable level of coverage.
The Ins and Outs of Car Deductibles
When it comes to understanding the ins and outs of car deductibles, choosing the right option can significantly impact your finances. Opting for car insurance with a $500 deductible strikes a balance between manageable out-of-pocket expenses and affordable monthly premiums.
If you prefer even cheaper options, cheap auto insurance with a $500 deductible can offer you lower monthly costs.
Deciding between a car insurance deductible: $500 or $1,000 depends on your budget and risk tolerance. While a $1,000 deductible generally lowers your monthly premiums, it increases your financial responsibility in the event of an accident.
When considering cosmetic damage car insurance, it’s essential to understand that minor issues like claiming small bumper damage might be better handled out-of-pocket, especially if the insurance estimate is lower than the body shop’s cost.
For those interested in comparing options, looking into cosmetic car insurance comparison and obtaining cosmetic car insurance quotes can provide insight into the best deals available.
Remember, the decision to file an insurance claim vs. paying out of pocket should factor in the potential increase in premiums and the car repair deductible you would need to pay. By carefully evaluating these aspects, you can make an informed choice that suits your financial situation.
Should you use your deductible for a single-vehicle accident with cosmetic damage (bumped your car into a wall)?
Use Your Deductible If:
- You have a clean driving record with no recent accidents: your rates might not increase by much if you file a claim.
- If the damage estimate exceeds about $2,000.
- If you don’t have cash or credit on hand to pay out of pocket right away, and the damage has affected headlights, turn signals, or other components that are required to keep your vehicle compliant with the laws of the road.
DON’T Use Your Collision Deductible If:
- If you were involved in an accident or moving violation within the past three years: your rates might be raised even higher, or your insurer might drop you as a customer.
- If the damage is less than about $2,000 (most cosmetic-only repair estimates won’t increase by more than 10%).
- If you have room on a credit card or cash on hand to pay for it and either pay off the credit balance or save up again over time.
- If the damage is minor and you can go without fixing it until you save up enough to pay for it. You can also try buffing out minor paint scratches, using dent-pulling suction cups, or other methods for DIY repairs.
Depending on which state you live in, you may not have to use your comprehensive deductible for repairs on glass or windshield repair or windshield replacement.
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Should you use your deductible for a single-vehicle accident with serious damage, suspension damage, and/or mechanical damage?
Use your deductible if:
- Your mechanic or repair shop reports a strong possibility of the price increasing due to unforeseen or “hidden” damage.
- Your insurance will pay for a rental as part of the claim, and if your vehicle isn’t safe to drive.
DON’T use your deductible If:
- Your mechanic or repair shop is confident the fix will be simple and straightforward, and gives you a clear estimate on the cost of repairs. Make sure to ask them specifically about price increases.
- If the repair estimate does not exceed $1,500 (mechanical or suspension repair estimates carry a higher risk of price increase than cosmetic damage).
- You can go without a car for a week (or three) while your car is in the shop for repairs.
- Your car is only worth about $3,000 and you plan on keeping it for longer than the next three or four years. Most vehicles worth around $3,000 will depreciate to about $1,500 within three or four years without any damage. With some collision damage, the same vehicle might sell for about $2,000 now and about $500 in a few years. It might not be financially viable to fix a cheap car if you’re only going to be driving it into the ground.
Should you use your deductible for multi-vehicle accidents like parking mishaps and low-speed fender benders?
Use your deductible if:
- You are at fault and the other driver is difficult, pushy, or vindictive. You might be able to pay out of pocket for another person’s damages if they’re easy enough to work with; however, if the other driver starts demanding extra cash for their inconvenience, feigning neck injuries, or otherwise makes your life difficult, just let your insurance company deal with them.
- The damage to one or both cars has affected headlights, taillights, turn signals, mechanical functions, or other elements of the vehicle necessary to drive safely and legally on the road. With this type of damage, the cars will need to be fixed right away. Unless you want to put down your credit card for the other driver’s rental car immediately, and potentially pay to tow their disabled vehicle to a repair shop, you might want to let your insurer handle such a claim.
DON’T use your deductible if:
- The damage is minor and the other driver has agreed to let you pay for their damages out of pocket, is easy to work with, and is not demanding a repair be completed immediately. Be sure to ask them to get multiple repair estimates and choose the most reasonable one; stay in contact with the other driver’s chosen body shop and ask about costs and price increases; book a rental vehicle a week or two weeks in advance to get a low rental rate; require they drop their car off on a Monday for repairs; and be sure the shop orders parts in advance for the fastest possible turnaround time on the repair.
- You’ve nudged someone’s bumper, but their bumper is already pockmarked and scraped, scratched, and dinged thoroughly. If their car’s rear end looks like a parking mishap warzone, you haven’t changed the quality or condition of their vehicle by adding one small extra ding, so you don’t owe them an upgrade to a brand new bumper. Attempt to negotiate with the driver and ask them to accept a settlement of a couple hundred dollars. If they don’t take care of their car very well, they may just accept and forget all about it, which will be much cheaper than an insurance rate increase. (For more information, read our “Accident Guide | How to Negotiate a Settlement: Part 1“).
Should you use your deductible for multi-vehicle accidents with serious damage, suspension damage, and/or mechanical damage?
Use your deductible if:
- Nearly all serious multiple-vehicle accidents resulting from on-the-road crashes will cost more than $2,000 to fix; furthermore, overseeing and micro-managing all aspects of such a costly claim are beyond most people’s ability, not to mention the time commitment needed.
DON’T use your deductible if:
- It’s best to file a claim and have your insurer handle the other driver’s damage for serious accidents where you are at-fault, but that doesn’t mean you have to get your car fully repaired, or even fixed at all. If the damage is cosmetic, or if you can simply fix the mechanical issues and leave the cosmetic damage, you can get a payout for the damage instead of fixing it. Ask your body shop for a basic repair to save money instead of a perfect job.
*The exception to this “increasing rates” rule is when using your own coverage to pay for a no-fault accident, where the other driver has no insurance or if their insurer is being difficult or exceptionally slow. In those cases, you’re free to file a claim with your insurer and let them pay the claim and seek reimbursement from the other driver. Keep in mind, you might have to pay your deductible upfront and wait for your insurer to reimburse you when they get repaid by the other insurer.
Frequently Asked Questions
What deductible should I get for car insurance?
The right deductible depends on your financial situation, risk tolerance, and monthly premium preferences. Lower deductibles offer less out-of-pocket expense in the event of a claim but come with higher premiums. Higher deductibles reduce monthly premiums but increase out-of-pocket costs.
What does a $500 deductible mean on car insurance?
A $500 deductible means you are responsible for paying the first $500 of any repair costs before your insurance coverage kicks in.
What does it mean when you have a $250 deductible?
With a $250 deductible, you pay the first $250 of repair costs for a claim, and your insurance covers the remainder.
What if the damage is less than the deductible?
If the repair costs are less than your deductible, it’s usually more cost-effective to pay for the repairs out-of-pocket rather than filing a claim.
What if my deductible is more than the damage?
If your deductible is higher than the repair costs, you’ll need to pay for the repair costs yourself, as the insurance will not cover anything below the deductible amount.
What if the repair is less than the deductible?
If the repair costs are less than the deductible, you should handle the repair costs out-of-pocket to avoid a potential increase in insurance premiums.
What is a $500 deductible in auto insurance?
A $500 deductible means you pay the first $500 of repair or damage costs before your insurance starts covering the remaining costs.
What is a $1,000 deductible car insurance?
A $1,000 deductible means you pay the first $1,000 of any claim before your insurance covers the rest. This typically results in lower monthly premiums.
What is a $2,000 deductible car insurance?
A $2,000 deductible means you are responsible for the first $2,000 of repair costs, with the insurance covering any additional costs. This usually results in the lowest monthly premiums.
What is a car insurance deductible?
A car insurance deductible is the amount you pay out-of-pocket for repairs or damages before your insurance policy covers the remaining costs.
What should my car insurance deductible be?
Your deductible should be chosen based on your financial situation and risk tolerance. A lower deductible results in higher premiums but less out-of-pocket expense for claims, while a higher deductible reduces premiums but increases upfront costs in the event of a claim.
When do you pay a car insurance deductible?
You pay the deductible when you file a claim and your insurance starts covering the repair costs. It is paid directly to the repair shop or your insurer.
When do you pay the deductible for car insurance?
You pay the deductible when you file a claim, typically before your insurance covers the remaining repair costs.
When should I go through insurance for a car scratch?
For minor scratches or small damage, it might be better to pay out-of-pocket rather than filing a claim to avoid potential premium increases. Consider using insurance if the damage is extensive or if you have significant repair costs.
When to use car insurance and when to pay out of pocket?
Use car insurance for significant damage or costly repairs. Pay out-of-pocket for minor damages or repairs that cost less than your deductible to avoid potential increases in premiums.
Do I pay my deductible to the body shop?
Yes, typically you pay the deductible directly to the body shop as part of the repair costs.
Do you have to pay the car insurance deductible upfront?
In most cases, the deductible is paid upfront or at the time of repair, before the insurance covers the remaining costs.
Do you pay the deductible before or after the car is fixed?
The deductible is generally paid before or at the time the repair work is completed.
Does car insurance cover cosmetic damage?
Car insurance typically covers cosmetic damage if you have collision or comprehensive coverage, but it might not be cost-effective to file a claim for minor cosmetic damage due to potential premium increases.
Does car insurance cover hitting a wall?
Yes, if you have collision coverage, it will cover the damage caused by hitting a wall, subject to your deductible.
How does the car insurance deductible work?
You pay the deductible amount out-of-pocket when filing a claim, and your insurance policy covers the repair costs beyond that deductible amount.
How much should the deductible be for car insurance?
The deductible amount should align with your financial situation and risk tolerance. Lower deductibles mean higher premiums, while higher deductibles reduce premiums but increase out-of-pocket costs for claims.
How often do you pay a deductible?
You pay a deductible each time you file a claim. The frequency depends on how often you need to make claims.
How to avoid paying a car insurance deductible?
To avoid paying a deductible, you could pay for repairs out-of-pocket if the costs are less than or close to the deductible amount. Additionally, some insurance policies may offer options for reducing or eliminating deductibles in specific scenarios.
How to pay a car insurance deductible?
Pay the deductible directly to the repair shop or as directed by your insurance company at the time of the claim.
Can I fix my car bumper through my insurance?
Yes, you can fix your car bumper through your insurance if you have collision coverage. However, consider whether it’s cost-effective to file a claim based on the repair costs and potential premium increases.
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Jimmy McMillan
Licensed Insurance Agent
Jimmy McMillan is an entrepreneur and the founder of HeartLifeInsurance.com, an independent insurance brokerage. His company specializes in insurance for people with heart problems. He knows personally how difficult it is to secure health and life insurance after a heart attack. Jimmy is a licensed insurance agent from coast to coast who has been featured on ValientCEO and the podcast Modern Li...
Editorial Guidelines: We are a free online resource for anyone interested in learning more about car insurance. Our goal is to be an objective, third-party resource for everything car insurance related. We update our site regularly, and all content is reviewed by car insurance experts.