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Collision deductible

A collision deductible is the amount you have to pay toward repairing or replacing your car when filing a collision claim.

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Rachael BrennanSenior Editor & Licensed Auto Insurance ExpertRachael Brennan is a senior editor and a licensed auto insurance expert at Policygenius. Her work has also been featured in MoneyGeek, Clearsurance, Adweek, Boston Globe, The Ladders, and

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Choosing a collision deductible for your car insurance isn’t an easy task. How much can you afford to spend in an emergency and how likely are you to file a claim? How do you know which deductible amount is the right one for you?

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The best collision deductible is the one you can afford to pay if your car is damaged in an accident. Collision insurance allows you to choose a deductible that works for you, which means you can choose a smaller or larger deductible based on your individual needs.

Key Takeaways

  • A deductible for collision coverage is the amount you agree to pay out-of-pocket in the event of a claim

  • Choosing a lower deductible means you will pay less out-of-pocket in an accident but you will pay more for your insurance, while a higher deductible means you will pay more toward a claim but less on your monthly insurance payment

  • A collision deductible waiver will pay your collision deductible if you are hit by an uninsured driver

  • Collision coverage pays to repair or replace your car if it is damaged in a collision, whether or not you were at fault

What is a collision deductible?

A collision coverage deductible is the amount you agree to pay out-of-pocket in the event of a claim. Insurance companies offer many different deductible levels, up to $1,000 or more, so you can choose a deductible that meets your needs. For example, if you have a $500 collision deductible and hit a fence, causing $3,000 in damage to your car, your insurance company would pay $2,500 and you would pay the other $500 toward repairs.

You will pay the deductible to your mechanic if your car needs repairs, but if your car is totaled the insurance company will simply write you a check for the actual cash value of your vehicle, minus your deductible.

While you have a deductible on both your comprehensive and collision insurance, most companies don’t require you to have the same deductible amount for both coverages. This means you can choose a different deductible for each type of coverage if that works best for you. Check with your insurance agent to find out what collision deductible they recommend in your situation.

How to choose your collision deductible

Choosing your deductible amount is part of the process of buying insurance, along with choosing your coverage limits and any add-ons you may need. There are several steps involved in choosing your collision deductible:

  1. Assess your risk level (population density of your city, traffic patterns, the number of accidents reported each year in your city, etc.)

  2. Take a look at your finances and decide how much you can reasonably afford to pay out-of-pocket if you are in an accident

  3. Talk to your insurance agent to find out how much each deductible amount will affect your rates

How does your deductible affect your rates?

When choosing a deductible, it is important to remember that a lower deductible will raise your rates, while a higher deductible will reduce them. People who are able to set aside $1,000 or more in an emergency savings account can safely choose a higher deductible, while people who don’t have much set aside for an emergency or who don’t want to be responsible for paying much out-of-pocket would do better with a lower deductible.

Is it better to have a $500 deductible or $1000?

Choosing a $500 deductible means you will be responsible for $500 toward the cost of a collision claim. This is a common deductible amount for both comprehensive and collision claims because it is low enough that most people could afford to pay it in the event of an emergency, but it is also high enough to bring down your overall insurance rates.

On the other hand, choosing a $1,000 deductible means you will be responsible for $1,000 out-of-pocket if you file a collision claim. A $1,000 deductible is a great way to keep your insurance rates as low as possible, but you will be responsible for a much larger amount when filing a claim. It also means you aren’t able to file some smaller claims. 

For example, if you back into a pole and break your tail light, you could end up paying anywhere from $300 to $700 for the repair, depending on the make and model of your car. Choosing a $1,000 deductible means you are responsible for paying for smaller accidents like this one without any help from your insurance company.

What is a collision deductible waiver?

A collision deductible waiver will pay your collision deductible if you are hit by an uninsured driver. This is typically an add-on to your insurance policy that you can purchase for an additional cost.

A collision deductible waiver only applies to very specific circumstances. To use your collision deductible waiver, a claim must meet very specific parameters, like:

  • You must not be at fault for the accident. If you were partially or fully at fault, expect to pay your deductible.

  • The other driver must be uninsured. If they have insurance and they are at fault for the accident, the claim would be covered by their property damage liability coverage.

  • The accident must not be a hit-and-run. Without another driver, your insurance company can’t determine who was at fault, which means your collision deductible waiver wouldn’t apply.

Whether or not a collision deductible waiver makes sense for you will depend on your individual needs. If you live in a place with a high percentage of uninsured drivers it may make sense to purchase a collision deductible waiver. However, you may be perfectly comfortable absorbing the cost of your deductible in this situation, so do what feels right for you.

What is covered under collision coverage?

Collision coverage pays to repair or replace your car if it is damaged in a collision, whether or not you were at fault. Collision coverage applies when:

  • You are in a collision with a tree, telephone pole, or other stationary object

  • You are in a single-car accident, like rolling or tipping your car

  • You are at fault in a collision with another vehicle

  • You are in an accident where an uninsured or underinsured driver is at fault 

Collision coverage pays to repair or replace your car in the event of an accident, whether or not you were at fault. When you purchase liability, comprehensive, and collision coverage together, this is typically referred to as full coverage insurance, which can be misleading because there is no such thing as an insurance policy that covers every possible scenario.

Frequently Asked Questions

What is the difference between comprehensive and collision deductible?

Comprehensive coverage pays for damage to your vehicle that was not caused by a collision, while collision coverage pays for damage that happens when you are in a collision with a stationary object or another vehicle. Because they cover very different claims, comprehensive and collision coverage have separate deductibles.

Is collision insurance worth it?

Depending on the value of your car, purchasing collision insurance may or may not be worth it. If you drive an older, cheaper vehicle and can afford to replace it out-of-pocket after an accident, it may not make sense to pay for collision coverage. On the other hand, drivers who can’t afford to replace their car or have a loan on their vehicle may need to have collision coverage.

When can I drop my collision coverage?

Legally, if you don’t have a loan on your car you can choose to have a liability only policy. However, if having to pay out-of-pocket to repair or replace your vehicle would be a financial hardship, the smart choice would be to purchase both collision and comprehensive insurance as part of a full coverage policy.