The insurance provider will ask you to choose your car insurance deductible levels if you choose full coverage while making your selections for your auto insurance policy. Deductibles are the amount you must pay out of pocket to repair your car after an accident before the insurance company will pay the rest of the cost. They apply to coverage types including collision and comprehensive coverage. Knowing the various deductible levels you can select and your best options for auto insurance is beneficial because deductibles are correlated with the amount of premiums you pay.
The cost of automobile insurance with a $500 deductible is explained here, along with a list of the top auto insurance providers to take into account while shopping for a coverage.
A car insurance deductible is what?
When your car needs repairs or replacement after a covered accident or event, your insurance deductible is the amount you would be required to pay out of pocket. Deductibles may also be applicable to claims for non-emergency medical care. Your deductible only applies when you file a covered physical damage claim, as opposed to insurance premiums, which represent the cost of covering your car for a specific amount of time. The size of the deductible, which typically ranges from $0 to $1,500, will determine how much you will pay in premiums. The typical deductible range is $500 to $1,000.
Your liability insurance will pay for the other party’s medical bills and property damage if you were the accident’s cause. This sum will not be subject to a deductible. However, if you file a claim with your car for comprehensive, collision, or personal injury protection (PIP), you’ll likely also have to pay an auto insurance deductible. You might also have one for claims involving property damage from uninsured or underinsured drivers. Depending on the state, a deductible may not apply to all types of coverage. The right deductible for each plan can be determined with the help of a professional insurance agent.
Car insurance premiums with a $500 deductible
According to Bankrate’s 2022 analysis of quoted yearly premiums, the average cost of vehicle insurance with a $500 deductible is $1,771 per year for a full coverage policy. The sample driver profile provided by Bankrate has a $500 deductible for collision and comprehensive insurance. Your rate, however, is probably going to be different from the national average due to a number of individual factors, including your state, your insurance company, and your policy options. A certified insurance agent can work with you to provide precise quotations based on your unique circumstances.
Most affordable $500 deductible auto insurance
You should be able to acquire estimates with this deductible level from several companies since a $500 deductible is a very popular choice. Examples of the top vehicle insurance policies with a $500 deductible for 2022 are shown in the table below, which was created by analyzing the average annual premiums by Bankrate.
| Car insurance company | Average monthly full coverage premium | Average annual full coverage premium |
|---|---|---|
| Erie | $110 | $1,321 |
| Geico | $108 | $1,297 |
| State Farm | $116 | $1,397 |
| Travelers | $121 | $1,447 |
| USAA | $101 | $1,209 |
In comparison to merely purchasing the bare minimum, a full coverage policy, which is commonly defined as a policy including liability, comprehensive, and collision coverage, offers better financial security. For more financial security, there are additional solutions accessible. In the event that your new car is totaled in a covered accident or if it is stolen and cannot be found, gap insurance, for example, helps cover the “gap” between what you owe on a lease or loan and the amount an insurance company values your car at.
Is a larger deductible preferable?
It is up to you to decide whether a greater or smaller deductible is preferable based on your financial situation. Although a higher deductible typically results in lower overall premiums, it also implies that you would be responsible for a greater portion of the cost of a collision or comprehensive claim involving your car. Having enough in savings to meet the deductible amount at any time is advised by several financial experts. For instance, if you are at fault in a car accident and your vehicle is damaged, the amount you choose for your deductible would be reflected in your out-of-pocket repair expenses.
The premium difference between selecting a $500 deductible and a $1,000 deductible is seen in the chart below. The average national premium savings from choosing the higher deductible choice is $215. Whether it is preferable to pay less up front and have to pay more out of pocket should you need to make a claim depends on your financial and personal condition.
How to maintain low auto insurance rates
One strategy to reduce the cost of your auto insurance policy is to raise your deductible. The cost difference between a greater and smaller deductible may occasionally be insignificant, or the higher deductible may be more expensive than you could bear to pay out of pocket. If so, there are still ways to control your auto insurance premium.
Examining all of your carrier’s discounts to see if you’re missing any that apply to your policy would be another strategy to keep your auto insurance costs low. The greatest approach to keep prices in your favor is to drive cautiously and preserve a clean driving record. A traffic offense or being at fault in an accident may result in a long-term increase in your vehicle insurance costs.
Methodology
In order to assess rates for all carriers and ZIP codes in all 50 states and Washington, D.C., Bankrate uses Quadrant Information Services. Based on the population density of each geographical area, rates are weighted. A 40-year-old male and female driver with a spotless driving record, good credit, and the following full coverage limits is used to calculate the quoted rates:
- Bodily injury liability of $100,000 per person
- $300,000 in responsibility for each accident’s injuries
- $50,000 in responsibility for property damage per incident
- Uninsured motorist bodily harm per person at $100,000
- Uninsured motorist bodily harm per accident: $300,000.
- $500 deductible for collision
- $500 for a full deductible
Bankrate utilized minimal coverage that complies with each state’s laws to determine minimum coverage limits. Our typical drivers commute five days a week, log 12,000 miles a year, and drive a 2020 Toyota Camry.
Only use these rates for comparison purposes since they are sample rates.
