Is Your Deductible Too High? When It’s Time to Reevaluate Your Auto Policy
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It’s not exactly easy to see when a deductible is too high — that really depends on you and your own personal financial situation. As a reminder, a deductible is the amount of a claim you’ll pay out of pocket before your insurer starts to kick in. If you have a high auto insurance deductible, you’ll be paying more out of pocket for a claim, but likely less in monthly premiums. A lower deductible usually means the opposite.
So if you’re looking for a new auto insurance policy quote, a key question to ask yourself is: when is a deductible too high for you specifically? This guide from Acceptance Insurance will help you figure out the right balance between monthly premiums and deductibles for your specific situation — and whether high vs low deductible car insurance makes sense for you.
How Auto Insurance Deductibles Work
When you file a claim, you will pay a certain amount of money before your insurer kicks in for their portion. While a health insurance policy has an annual deductible, auto policies are actually paid per claim. As an example of how this works:
- You damage your car in an accident, and you have a total repair cost of $1,500.
- Your deductible is $500 (PER CLAIM), so your policy covers $1000, and you pay the remaining $500.
But there is a wrinkle here. If your repair cost is less than your prescribed amount, you’ll likely pay the entire amount yourself out of pocket. Liability coverage (bodily liability and property damage liability) do not have a deductible, but collision and comprehensive do, which leads to the next point.
Collision vs. Comprehensive Deductibles
Collision and comprehensive insurance can have different deductible amounts. They do not have to match. Some windshield/glass claims may have special rules (for example, lower or waived deductibles in certain situations), depending on state and insurer.
As a reminder, collision covers damage to your car in a vehicle or object collision (regardless of fault), while comprehensive applies to things like theft, vandalism, fire, major weather incidents, animals, etc. Think of both of these policies like car repair expenses or replacement insurance plans.
How Deductibles Affect Premiums
The big tradeoff here is how much you pay per month vs how much you pay per claim. A short and simple rule you can use is:
- Higher deductible = lower premium, but more out-of-pocket cost if you file a claim.
- Lower deductible = higher premium, but less out-of-pocket cost when you need repairs.
What’s the cue on when to change amounts? Your ability to pay out of pocket is what determines the answer. An agent can also help you make this decision by looking at your personal finances and savings. There’s no “right” answer that applies to everybody. Here is a chart to help illustrate the concepts.
| Frequency of Claims | Best Deductible Strategy |
| Low claims + strong savings | High deductible saves money |
| Low claims + strong savings | Medium deductible recommended |
| High claims + strong savings | Medium deductible (high risk) |
| High claims + weak savings | Low deductible essential |
Signs Your Deductible Might Be Too High
A higher cost for you isn’t automatically bad. The problem is choosing a number that looks fine on paper but fails you at the exact moment you need it. Put simply: If it would stress your bank account, a covered claim with a high amount might be a problem.
You Can’t Comfortably Pay It Out of Pocket
If you’d struggle to come up with the money quickly, that’s a red flag. This only helps if you can actually pay it when a claim happens. Otherwise, repairs may be delayed or become a debt problem. Or you may not be able to make repairs if you only get a check from your insurer for part of the total cost.
Your Financial Situation Has Recently Changed
If something has happened in your life that makes you reevaluate how you spend or save money, you should take a look at your deductible again. If you’ve lost a job or gotten a new one, had a child, or have decided to pay down savings for a major expense, you might want to change it. The National Association of Insurance Commissioners specifically recommends reviewing and updating your policy when circumstances change, and weighing premium vs. deductible as part of that decision as part of best practices when buying auto insurance.
Your Car’s Value Has Decreased
Collision and comprehensive typically pay up to the car’s fair market value (not what you originally paid), so paying high premiums for a low-value vehicle can stop making sense over time, according to the NAIC (and that’s one easy way to get car insurance savings).
But that doesn’t mean you should just drop the coverage immediately. Just check to see if it still makes sense based on the current value of your car and whether you have the money in the bank to handle major losses. Again, an agent can be helpful here.
When a Higher Deductible Actually Makes Sense
You might want a higher value if you have the bank to handle unexpected situations. Basically, this idea is called “self-insuring” — you pay out of your own pocket for problems. The same idea somewhat applies to health insurance, but is unique for auto policies because of the fact that deductibles apply per claim. That’s a key point to remember when choosing car insurance deductible amounts.
Drivers With Strong Emergency Savings
If you have a dedicated emergency fund and could pay the deductible tomorrow without reshuffling bills, a higher deductible may be a reasonable way to lower your monthly premium. Some drivers even create a “reserve fund” in savings; if you raise yours and save $20–$30/month, you automatically transfer that amount into a separate account. Over time, you’re self-funding the risk.
Older Vehicles With Lower Claim Risk
If your vehicle is older, has been driven fewer miles, and you’re mainly trying to protect against major losses, a higher deductible can fit. Collision and comprehensive aren’t required by states, though lenders may require them while a loan is active. If you’re financed or leased, also check whether your lender has deductible requirements. Some lenders want lower deductibles to protect the collateral.
How to Reevaluate Your Auto Policy This Year
It’s not just about what you can pay, but it does matter a lot when reviewing your policy annually. You should look at your personal finances, including savings, and compare that to your deductible and premium. That’s a great way to do a tune-up on your policy this year.
Comparing Quotes with Different Deductibles
When you shop around, don’t just compare one quote to another. Compare multiple deductible options from the same insurer so you can see how much your premium changes when you move from $500 to $1,000 (or the reverse).
Reviewing Your Driving Habits and Risks
A deductible that made sense yesterday may not make sense today. If you’re driving fewer miles, your car is more expensive to repair than a prior vehicle, or your commuting habits have changed, have a look. Also realize that repair costs continue going up, as do part costs, which makes premiums climb too.
Review Your Deductible Today — Get a Smarter Auto Insurance Quote
If you’re unsure whether your policy is helping you or hurting you, the fastest way to get clarity is to run side-by-side quotes with different deductibles and compare the monthly savings to the extra out-of-pocket risk. Acceptance auto insurance is built to be flexible so you can tailor coverage to your budget and needs, whether you’re aiming for lower payments, more predictable costs, or both.
We’re here to help! Get a quote online, give us a call at (877) 405-7102, or visit one of our offices today for affordable auto insurance!
FAQs
Does Choosing a Higher Deductible Really Save Money?
Higher deductibles generally lower premiums, while lower ones increase premiums. The REAL question to ask yourself is whether the premium drop is big enough to be worth the added risk. Lower “ceiling” costs can accumulate with higher premiums.
Can I Change My Deductible Any Time?
In many cases, you can request a change by contacting your insurer or agent, though timing and effective dates vary by company and policy. Some insurers note you can usually change deductibles outside renewal as a policy change.
What Is the Most Common Deductible for Drivers?
A common choice for collision and comprehensive as of 2026 is $500.
Do Comprehensive and Collision Deductibles Have To Match?
No. Many policies allow different values for comprehensive and collision.
How Do I Know What Deductible Fits My Budget?
A practical rule: pick one you could pay quickly without missing essentials. Then get a quote!
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