Should I Raise My Car Insurance Deductible?
Answer a few honest questions and our Decision Guide will tell you whether to raise your deductible, keep it where it is, or go aggressive with a $2,000+ self-insure play.
Published
For most drivers with at least $1,000 in accessible savings and a clean recent driving record, yes — raising your auto insurance deductible from $500 to $1,000 is one of the easiest premium wins there is. The Insurance Information Institute estimates that moving to a $1,000 deductible can cut the collision and comprehensive portion of your premium by 40% or more, typically $150-$300 a year. The honest break-even test: divide the extra $500 of risk by your annual savings — if the result is under 2.5 years, the math favors raising the deductible, and the average driver files a collision claim only about once every 18 years anyway. The decision flips the other way if you've had multiple claims or tickets recently, you don't have a real emergency fund, or your car is worth so little that a $2,000 deductible would exceed what the insurance could even pay out. Critically: if your car is financed or leased, check the loan agreement first — lenders routinely cap deductibles at $500 or $1,000, and you can't go higher without their approval.
Sources
- Understanding your insurance deductibles — Insurance Information Institute
- Nine ways to lower your auto insurance costs — Insurance Information Institute
- How Does a Car Insurance Deductible Work? — NerdWallet
- Should I Raise My Car Insurance Deductible? — Experian