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Raise your car insurance deductible to lower your rates: Savings by state

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Discounts for pay as you drive insuranceIf you’ve got the cash in the bank to cover the unexpected expense, hiking the car insurance deductible on your auto insurance coverage could save you hundreds of dollars a year.

The portions of a policy that carry a deductible are two optional coverages, comprehensive and collision, that cover physical damages. A deductible is the amount you pay before your insurance kicks in. Typically you can choose a deductible of $250, $500 or $1,000, but amounts can go as high as $2,500.

Combined, collision coverage and comprehensive insurance are often referred to as "full coverage." Here's how they break down:

  • Collision coverage covers your own car damages after your vehicle collides with something -- another car, a fence, a wall, a tree, anything except an animal.
  • Comprehensive coverage covers everything else -- theft, vandalism, flood damage, a falling tree or branches, an animal strike.

These two coverages pay out up to the actual cash value of your car, minus your deductible.

The costs of comprehensive and collision are determined by the value of your car and the likelihood that the insurance company will have to pay out that amount. There are only three ways to save money on the cost of that coverage:

  • Drop the coverage altogether if you own your car outright.
  • Shop around with different carriers. Rates can differ by hundreds of dollars.
  • Raise the deductible.

Why raising deductibles saves you money

Unlike liability coverage, which doesn't have a deductible, collision and comprehensive insurance pays only the amount that exceeds the deductible. The higher the deductible, the less risk the insurer takes and the lower the premium.

"If you have a higher deductible, it's likely you won't make as many claims," says Penny Gusner, consumer analyst for CarInsurance.com. "If your deductible is $1,000, you're not going to be putting in claims for every little door ding because you know small claims are below your deductible amount."

CarInsurance.com compared rates on the same driver for three cars at deductibles ranging from $250 to $2,500. If the sample driver, a 35-year-old man with a clean record living in Houston, bought the cheapest policy shown, he could save about 50 percent on his annual collision and comprehensive premiums by raising his deductible from $250 to $2,500. The figures below don’t include state-required liability coverages, which don’t have a deductible.

2004 Mazda3

Deductible

Collision

Comp.

Total

$250

$288

$104

$392

$500

$270

$86

$356

$1,000

$220

$70

$290

$2,500

$162

$54

$216

2008 Honda Accord EX

Deductible

Collision

Comp.

Total

$250

$396

$120

$516

$500

$336

$102

$438

$1,000

$268

$84

$352

$2,500

$186

$62

$248

2012 Ford Explorer

Deductible

Collision

Comp.

Total

$250

$444

$192

$636

$500

$416

$160

$576

$1,000

$340

$130

$470

$2,500

$256

$96

$352

Reduction on average premium by state by raising deductible

Below are the average rates in each state for three deductible levels. CarInsurance.com commissioned Quadrant Information Services to run auto insurance rates for a 2015 Honda Accord LX for 10 ZIP codes in each state using six large carriers -- Allstate, Farmers, GEICO, Nationwide, Progressive and State Farm. Averages were calculated based on single male and female drivers ages 18 to 85 who commute 12 miles to work.

All samples include liability insurance limits of $100,000 of bodily injury per person, $300,000 of body injury per accident and $100,000 of property damage.

State

How much you save by increasing deductible from $250 to $500

Reduction percentage

How much you save by increasing deductible from $500 to $1000

Reduction percentage

How much you save by increasing deductible from $250 to $1,000

Reduction percentage

Alabama

$192

8.7%

$230

11.5%

$422

19.2%

Alaska

$144

8.6%

$183

11.9%

$327

19.5%

Arizona

$147

8.2%

$168

10.3%

$315

17.7%

Arkansas

$168

8.0%

$204

10.6%

$372

17.8%

California

$197

7.1%

$306

11.9%

$503

18.2%

Colorado

$155

8.0%

$185

10.4%

$340

17.5%

Connecticut

$131

5.1%

$154

6.3%

$285

11.2%

D.C.

$267

9.5%

$322

12.7%

$588

21%

Delaware

$205

6.8%

$287

10.2%

$493

16.3%

Florida

$133

4.9%

$138

5.4%

$270

10%

Georgia

$168

7.8%

$166

8.3%

$333

15.4%

Hawaii

$92

7.7%

$115

10.5%

$207

17.4%

Idaho

$152

9.1%

$146

9.6%

$298

17.9%

Illinois

$150

9.1%

$191

12.8%

$342

20.7%

Indiana

$200

10.5%

$213

12.5%

$414

21.7%

Iowa

$192

12.5%

$170

12.7%

$362

23.5%

Kansas

$180

10.1%

$231

14.4%

$411

23%

Kentucky

$123

6.3%

$173

9.6%

$296

15.3%

Louisiana

$169

5.7%

$192

6.8%

$362

12.1%

Maine

$158

10.3%

$175

12.8%

$332

21.8%

Maryland

$161

7.4%

$207

10.4%

$368

17%

Massachusetts

$137

6.6%

$272

14.0%

$410

19.6%

Michigan

$284

7.4%

$326

9.2%

$611

16%

Minnesota

$177

9.0%

$210

11.8%

$388

19.8%

Mississippi

$139

7.0%

$172

9.3%

$311

15.6%

Missouri

$175

10.2%

$179

11.7%

$353

20.7%

Montana

$202

9.2%

$289

14.5%

$491

22.4%

Nebraska

$51

4.9%

$61

6.2%

$390

23.5%

Nevada

$260

12.6%

$318

17.8%

$255

13.5%

New Hampshire

$179

10.8%

$211

14.2%

 $325

19.6%

New Jersey

$142

8.6%

$182

12.0%

$358

13.1%

New Mexico

$185

6.8%

$173

6.8%

$296

16.4%

New York

$134

7.4%

$162

9.7%

$370

17.7%

North Carolina

$120

6.4%

$134

7.6%

$112

10.9%

North Dakota

$172

8.2%

$197

10.3%

$578

28.2%

Ohio

$132

8.7%

$157

11.3%

$289

19%

Oklahoma

$241

8.9%

$293

11.8%

$535

19.7%

Oregon

$134

6.8%

$158

8.5%

$292

14.7%

Pennsylvania

$158

8.9%

$188

11.6%

$345

19.5%

Rhode Island

$191

7.9%

$213

9.6%

$403

16.7%

South Carolina

$119

6.4%

$168

9.7%

$287

15.4%

South Dakota

$217

12.3%

$240

15.5%

$457

25.9%

Tennessee

$139

7.1%

$185

10.2%

$324

16.6%

Texas

$134

5.8%

$199

9.1%

$334

14.4%

Utah

$125

7.8%

$126

8.5%

$251

15.6%

Vermont

$123

8.0%

$143

10.1%

$276

17.3%

Virginia

$120

7.6%

$155

10.6%

$266

17.3%

Washington

$122

6.9%

$135

8.2%

$257

14.5%

West Virginia

$249

11.7%

$225

12.0%

$439

21.2%

Wisconsin

$186

9.0%

$253

13.4%

$474

22.3%

Wyoming

$205

11.4%

$242

15.2%

$447

24.9%

National average

$167

8.3%

$201

10.8%

$367

 18.1% 


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