Auto Insurance Deductibles Explained: What Nobody Tells You (2025)

Got a call from my cousin last Tuesday. She’d just been in a fender bender—nothing serious, thank god—but she was losing her mind because the body shop quoted her $1,800 and she “thought insurance covered this stuff.” Took me twenty minutes to explain that yes, her insurance DOES cover it, but she’s gotta pay her deductible first. She had no idea what her deductible even was. Turns out it was a thousand bucks.

She was not happy with me. Like I personally set her deductible or something.

This happens constantly. I spent six years as a claims adjuster and I swear the most common phone call wasn’t “is my claim approved” or “when do I get paid”—it was people absolutely blindsided by the fact that they owe money before we pay anything. And look, I get why nobody understands this. When you’re buying insurance the agent rushes through the deductible part because they want to get to the monthly payment. You pick a number, you forget about it, and then two years later you’re standing in a body shop parking lot having a very bad day.

So let me just—okay. A deductible is the amount YOU pay before your insurance pays anything. That’s literally it. If you have a $500 deductible and your repair costs $2,000, you pay $500 and insurance covers the other $1,500. Simple math.

Except it’s not simple because nothing in insurance is ever simple.

The part where most people get confused

Car insurance deductibles aren’t like health insurance. I cannot stress this enough. With health insurance you have that annual deductible thing where once you hit your number you’re basically covered for the rest of the year. Car insurance doesn’t work that way AT ALL. You pay your deductible every single time you file a claim. Get rear-ended in January, pay your deductible. Back into a pole in March, pay your deductible again. There’s no yearly reset, no “meeting your deductible”—every claim is its own thing.

I had a guy call me once who’d been in three accidents in one year (not his fault on two of them, but still) and he was FURIOUS that he’d paid his deductible three times. “I already paid it!” he kept saying. Yeah man. That’s how it works. Nobody explained it to you and I’m sorry about that but also I didn’t make the rules.

The average deductible is around $500—that’s what most people pick. The range is usually $500 to $1,000, though I’ve seen policies with $250 deductibles and I’ve seen policies with $2,500 deductibles. The higher your deductible, the lower your monthly premium. That’s the trade-off.

Wait you have TWO deductibles??

Yeah. Probably. Most people do and most people don’t realize it.

You’ve got a collision coverage deductible—that’s for when your car hits stuff. Another car, a guardrail, a mailbox, whatever. If your car was moving and collided with a thing, that’s collision coverage and you pay the collision deductible.

Then you’ve got a comprehensive deductible—that’s for everything else. Theft. Vandalism. Hail damage. A tree falling on your car. Hitting a deer (I’ll get to the deer thing in a second because it confuses EVERYONE). Fire. Flood. Some guy’s catalytic converter getting stolen, which happens constantly now.

These deductibles can be different amounts. You might have $500 for collision but $250 for comprehensive. Or $1,000 for both. Or whatever combination you picked when you bought the policy, probably without really thinking about it.

I named my chickens after insurance coverages. Liability, Collision, and Comprehensive. Comprehensive is the escape artist—she gets out of the backyard like twice a week. My neighbors definitely think I’m insane when I’m out there at 7am yelling “COMPREHENSIVE GET BACK HERE.” But honestly she’s earned the name because comprehensive coverage is the one that covers the random unexpected stuff, and that chicken is nothing if not random and unexpected.

Anyway.

The deer situation (this comes up SO much)

Okay so here’s something that tripped people up constantly when I was adjusting claims. If a deer runs out and you hit it—like actually hit the deer with your car—that’s comprehensive. Comprehensive covers animal collisions.

BUT. If a deer runs out and you swerve to AVOID the deer and hit a tree instead? That’s collision. Because your car collided with a tree, not an animal.

Same deer. Two different coverages. Two potentially different deductibles.

“That’s the dumbest thing I’ve ever heard” is something I heard approximately one million times during my adjusting years. And like. Yeah. I agree. But I didn’t make the rules, I just had to explain them to increasingly angry people.

This matters because if your comprehensive deductible is lower than your collision deductible—which is pretty common—hitting the deer directly is actually cheaper for you than swerving into a tree. I am NOT telling you to hit deer on purpose. Please don’t do that. Deer are big and can come through your windshield and kill you. I’m just saying the system is weird and you should understand how it works.

How to pick the right deductible (my actual opinion)

Everyone always asks me this and I hate the question because there’s no perfect answer. But here’s how I think about it:

Can you actually pay that deductible right now? Like if you got in an accident tomorrow, do you have $1,000 or whatever sitting in an account that you could spend? If the answer is no, your deductible is too high. I don’t care how much you’re saving on your premium. If you can’t actually pay the deductible when something happens, you’re screwed.

The Insurance Information Institute says raising your deductible from $500 to $1,000 can save you like 15-40% on your collision and comprehensive premiums. That sounds amazing right? And it can be a smart move if you have savings. But I watched people fall apart over this constantly. They’d pick a high deductible to save money monthly, then something would happen and they couldn’t afford to get their car fixed.

Here’s what I do personally: $500 across the board. It’s not the cheapest option but it’s low enough that I can handle it without having a panic attack, and my premiums aren’t insane. I drive a 2016 Camry so it’s not like I’m insuring a Tesla or anything.

Oh and speaking of—the average driver is paying like $2,189 a year now for car insurance according to The Zebra’s 2025 data. That’s up almost 20% from last year. Everything is more expensive, repairs are more expensive, and insurance companies are raising rates like crazy. So I totally understand wanting to bump up your deductible to save money. Just make sure you’re not trading one problem for a worse problem.

When you pay vs when you don’t

This confuses people too. You pay your deductible when you file a claim on YOUR insurance—collision or comprehensive. Doesn’t matter whose fault the accident was. If you’re using your coverage, you’re paying your deductible.

You DON’T pay a deductible when you’re filing a claim against the OTHER driver’s insurance. If someone rear-ends you and it’s clearly their fault, you file with their insurance, their liability coverage pays for your repairs, you don’t owe anything. No deductible.

But here’s where it gets complicated. Let’s say someone hits you but they don’t have insurance. Or they don’t have ENOUGH insurance. This happened to me in 2021—some guy rear-ended my Camry, totaled it completely, and when I went to file a claim I found out his insurance had lapsed two months earlier. He just hadn’t bothered to renew it. Cool cool cool.

I had uninsured motorist coverage (THANK GOD) so I was able to file through my own policy. But I still had to pay my deductible. Even though it wasn’t my fault at all. Even though some idiot without insurance destroyed my car. I still owed my $500.

Did I get it back eventually? Yeah, theoretically I could have sued the guy. In practice he clearly didn’t have money (hence the no insurance situation) so it wasn’t worth pursuing. I ate the $500 and moved on with my life. Still bitter about it though.

About 14% of drivers are uninsured now. So this isn’t some rare edge case—you’ve got a decent chance of getting hit by someone without coverage at some point.

The windshield thing

Random but useful: some states have laws that say insurance companies have to cover windshield repairs with no deductible. Florida, Kentucky, and South Carolina have zero-deductible windshield coverage. Arizona requires insurers to at least offer the option. If you live somewhere with lots of rock chips or hail this is worth looking into.

I probably replaced three windshields during my years in Portland and I had no idea about any of this until after I left the industry. Which is embarrassing. But in my defense I was processing claims in Oregon where we don’t have the zero-deductible windshield thing anyway.

Those “disappearing deductible” programs

Progressive and Allstate and a few others have these programs where your deductible goes down over time if you don’t file claims. Like $100 off per year of safe driving or whatever.

Are these worth it? Honestly… maybe? You have to do the math. If they’re charging you extra for the program, figure out how long until you actually save money. If it takes three years of paying extra to save $300 off your deductible, and there’s a good chance you might file a claim in those three years anyway (which resets everything), it might not be worth it.

I’m not saying it’s a scam. Some people do great with these programs. I’m just saying run the numbers before you sign up for anything.

What to do if you can’t afford your deductible

This happened all the time when I was adjusting. Someone would have $1,000 deductible, $1,200 in damage, and absolutely no way to come up with a grand right now.

Options are limited but they exist. Some body shops do payment plans—not all of them, but it doesn’t hurt to ask. If the other driver was partially at fault, you might be able to get some money from their insurance to help cover it. And honestly sometimes you just have to wait until you can afford it. That sucks. I know. But filing a claim you can’t actually see through can cause more problems.

Alright I think that’s everything

Look just—go check your policy. Right now. Find your declarations page (it’s the summary sheet with all your coverages and limits) and look at what your deductibles actually are. Both of them. Collision and comprehensive. Know what you’re working with BEFORE you need to file a claim.

And if you can’t find your deductible or don’t understand something, call your insurance company and make them explain it. That’s their job. Make them do it.

Comprehensive just knocked something over in the backyard. Gotta go. But seriously—check your policy.