Choosing a Car Insurance Deductible
A deductible is a decision about which losses you would rather absorb yourself.
At a glance
Figures checked 1 Sep 2026
What to take away
- Divide the extra deductible by the annual premium saving to get your break-even in years.
- Only raise the deductible to a figure you could pay tomorrow from savings.
- The deductible applies per claim, not per year.
Raising a deductible from $500 to $1,000 typically cuts collision and comprehensive premiums by roughly a tenth. Whether that is a good trade is arithmetic, not preference.
The break-even calculation
Suppose the increase saves $90 a year and adds $500 of exposure. $500 divided by $90 is about 5.6 years. If you expect to claim less often than once every five and a half years, the higher deductible wins on average.
Average is not the same as affordable. If a $1,000 bill would go on a credit card at 23% APR, the saving is illusory. Match the deductible to your emergency fund, not to the spreadsheet.
Common questions
No. Deductibles apply to your own vehicle coverage — collision and comprehensive — not to the liability that pays other people.
Usually yes, with the premium adjusted pro rata. The change applies to claims after the effective date.