Leslie Kasperowicz holds a BA in Social Sciences from the University of Winnipeg. She spent several years as a Farmers Insurance CSR, gaining a solid understanding of insurance products, including home, life, auto, and commercial, and working directly with insurance customers to understand their needs. She has since used that knowledge in her more than ten years as a writer, mainly in the insuranc...

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UPDATED: Oct 19, 2021

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Important facts to know...

  • Your deductible is an amount you are required to pay before your policy limits take effect
  • There are several factors that are taken into consideration when determining if you need to pay your deductible
  • If you were responsible for the incident, then your provider may require you to pay the deductible to get your car replaced or repaired
  • If another driver was at-fault for the incident, then you may not have any deductible to pay before replacing or repairing your car
  • However, when your vehicle is damaged in ways unrelated to a collision, you may still have a deductible to pay before your car is repaired or replaced

Your insurance policy often includes a deductible for certain coverage options, which is an amount that you are responsible for paying before your coverage limits take effect.

This is normally an agreed upon amount between you and your insurance provider, either a set dollar amount or a percentage of your loss. It’s important for you to understand the conditions surrounding your coverage and when your deductible will apply.

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What is your deductible?

There are many different coverage options that make up your car insurance policy.

In this options, there are some that are required and some that are optional. Within these optional selections, there are some that come with a required deductible. The deductible is an amount that the policyholder is normally required to pay before coverage takes effect for a covered loss.

Insurance providers use the deductible to offset the higher costs associated with providing car insurance coverage.

The deductible requires that portions of a covered loss be retained by the policyholder, which also reduces the amount of smaller claims being filed with the provider.

Insurance deductibles normally apply to coverage options like collision and comprehensive coverage. When you are looking to purchase insurance coverage, or if you’re renewing your current policy, make sure you review your coverage and any listed conditions; this includes any deductibles.

Different providers may have different deductible amounts or limits of coverage, which means you should look at multiple quotes before deciding on an insurance policy. If you have questions about any options or coverage conditions, make sure you speak to your provider before there is an accident or other covered incident.

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When do you normally need to pay your deductible?

If you carry collision coverage or comprehensive coverage on your car insurance policy, then you may need to pay a deductible for any covered loss.

When you are in a collision involving another car or a stationary object, the first step many people make is to contact their insurance provider. Depending on which driver is at-fault for the incident may determine if you need to file a claim and pay a deductible for your loss.

When you file a claim under your policy for a covered collision loss, there is normally a deductible amount you will be responsible for paying.

If your car is damaged by an incident not related to a collision, such as when rodents cause damage to your car’s electrical system, then your insurance policy may cover the loss. This loss would normally fall under your policy’s comprehensive coverage, which often includes a deductible for covered losses.

It’s always important to take your policy limits and your deductible amount into consideration before filing a claim. For instance, if you are filing a claim for a covered loss of $1,500, and you carry a deductible amount of $500, then you may be required to pay your deductible before coverage applies.

In this scenario, you would be responsible for paying the $500 before your policy would cover the remaining $1000 of the loss.

Is your deductible a requirement for every loss?

There are different claim-related incidents where you may not be required to pay a deductible.

One of the most common reasons a deductible is not required is when you are involved in an accident but are not at-fault.

When you file the claim under the at-fault party’s car insurance policy, your vehicle repairs or replacement normally falls under their insurance coverage. In these situations, you are not normally required to cover any of the loss as you were not responsible for it.

Also, your insurance provider may be willing to provide a claim settlement even if you cannot pay your deductible.

However, in these situations, your settlement is normally reduced by the deductible amount before being provided to you. Although you are not paying your deductible in the traditional manner, you are still ultimately covering a portion of the loss.

If your car is damaged by an underinsured or uninsured driver, then you may be covered by underinsured and uninsured motorists coverage.

This coverage option may also apply to hit-and-run accidents, and helps protect your car when you are not responsible for a loss but the other party is not able to cover it with their policy.

These insurance claims may not require a deductible, as you are covering a loss that another individual was financially responsible for covering.


The deductible on your insurance policy is one way that your insurance company helps reduce the costs that come from car insurance claims.

Having the policyholder cover part of the loss allows your provider to offer settlements to larger claims and losses. This deductible helps to reduce the amount of claims filed as well, as claims below the deductible amount are not normally covered by your car insurance policy.

It’s important that you take the time to review your insurance policy and coverage options each year, which gives you the chance to decide if your coverage is right for your needs.

During this review you should assess your policy limits and your deductibles, making sure that you are still able to meet any conditions or obligations. If your policy has changed or been altered, it may be the perfect time to get quotes for coverage from other insurance providers.

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