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What is a car insurance deductible and how does it work?

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What is the meaning of “deductible” in regard to car insurance? Your auto insurance deductible is the amount of money you pay for car repairs before your insurance company will cover the rest. 

Car insurance deductibles vary depending on the policy. Increasing your deductibles can lower your California car insurance rates, but you’ll be responsible for paying more out of pocket after a claim.

Before changing your insurance deductibles, please read our guide to determine the the meaning of “insurance deductible,” how an auto insurance deductible works, and when to pay the deductible for car insurance. 

Different auto insurance companies have various deductible amounts, so we’ll help you find and compare free California car insurance quotes.

Before we explain the car insurance deductible, enter your ZIP code above to start comparing quotes from the most affordable California auto insurance companies in your neighborhood.

What is a car insurance deductible?

Your car insurance deductible is the amount of money you agree to pay for repairs before your insurance policy kicks in to cover the rest. You decide on your deductible amount when you purchase California auto insurance.

Deductibles will impact your rates. When you shop for California car insurance quotes, most quote comparison tools like ours will let you select different deductible amounts. It’s important to shop around and choose deductibles and coverages that suit your needs.

How much do California car insurance deductibles cost?

Most car insurance companies offer deductibles of $100, $500, and $1,000. However, some companies can offer higher or lower deductibles. Shop around with multiple companies to find the deductible that fits your budget.

On average, California auto insurance deductibles are $500.

This indicates that drivers must pay $500 worth of repair costs before the insurance company will cover the rest of the damages. 

However, deductibles are only applied to collision and comprehensive coverage. In addition, California car insurance laws require drivers to carry at least liability coverage. So, if you don’t carry full coverage, you don’t need to worry about an auto insurance deductible.

Review this table to discover how full coverage impacts your California car insurance rates with the top companies:

Car Insurance CompanyMonthly Liability-Only RatesMonthly Collision Car Insurance RatesMonthly Comprehensive Car Insurance Rates
Allstate$357$381$395
Farmers$388$420$442
GEICO$218$243$260
Liberty Mutual$235$255$268
Nationwide$348$395$420
Progressive$213$245$255
State Farm$316$356$379
Travelers$244$287$307
USAA$204$229$241

If you choose collision and comprehensive coverage, remember that your deductible amounts can increase or decrease your rates. You may find that your insurance rates are much lower if you select a higher deductible. But realize that, with a higher deductible, your insurance policy will cover much less in the event of an accident.

How does a car insurance deductible work?

Car insurance deductibles protect insurance companies from paying exorbitant repair costs. Instead, drivers agree to pay a certain amount out of pocket before the insurance policy picks up the rest. The idea behind insurance deductibles is to deter drivers from filing insurance claims for every minuscule issue.

For example, if your windshield cracks and it costs $700 to repair, you may want to file an insurance claim. However, if your insurance deductible is $500, your insurance would only cover the remaining $200 but still raise your rates for filing a claim. 

On the other hand, suppose that you’re rear-ended in an accident, and it will cost $2,000 to replace your damaged trunk and bumper. In that case, the insurance company would pay the remaining $1,500 after your $500 deductible.

When do you pay the deductible for car insurance?

You will pay your car insurance deductible any time you file a claim. Sometimes, you will pay the entire repair bill up front, and the insurance company will reimburse you for the repairs minus your deductible.

Your insurance company will always consider your deductible first, and you will be required to pay it before any insurance coverage can be applied to your claim. However, you only have to pay your car insurance deductible if you are at fault for the accident or collision.

Since California is an at-fault state, the driver found at fault for the accident will be responsible for the insurance coverage. Therefore, it will be the at-fault driver who is required to pay their deductible before their insurance company covers the repairs and medical bills.

How to Choose a Car Insurance Deductible

If you’re wondering, How do I choose my deductible?, consider your budget and how much you’re willing to pay out of pocket to repair your vehicle. You may also want to consider:

  • Your likelihood of filing a claim
  • The value of your vehicle
  • The terms of your auto lease or loan

Most auto financiers and loan companies require full coverage auto insurance, which will require deductibles and higher rates. In general, comprehensive deductibles are more expensive than collision deductibles, but drivers can often choose the same amount for both.

To decide how much your car insurance deductible should be, compare insurance quotes online and select different deductible amounts each time. Raising or lowering your deductibles can increase or decrease your rates. So shop around with multiple companies to determine which one offers the best deductibles and full coverage car insurance rates.

Begin comparison shopping right here with our free quote comparison tool. Enter your ZIP code to acquire free quotes from the best California car insurance companies today.

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