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Which coverages come with a deductible?


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Question: Which types of car insurance coverage come with a deductible?  I am trying to figure out deductibles so I can shop around and compare rates.

Answer: That's smart, because a deductible is the amount you have to pay out-of-pocket before certain coverages kick in.  Car insurance deductibles are per incident.  Thus, each time you make a claim under a coverage that has a deductible associated with it, the deductible will be due. 

The types of car insurance coverage that usually may require you to choose a deductible include:

  • Collision
  • Comprehensive
  • Uninsured motorist property damage (UMPD)
  • Personal injury protection (also known as PIP or no-fault)

Keep in mind that one accident could result more than one deductible being due.  For instance, if you crash your car into a tree and are injured, you could make a collision claim for your car’s damage and a PIP claim for your injuries.  You then may owe a deductible for each coverage.

Physical damage deductibles

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Collision and comprehensive are the types of physical damage coverage available on a car insurance policy.  These are the only coverages that you can purchase as part of your car insurance policy that will cover your insured vehicle if it’s damaged, regardless of fault.

Collision covers if your car hits, or is hit by, another vehicle or object. Comprehensive covers your car for theft, fire, vandalism, animal strikes and damage from natural events like a hail or wind storm. 

These coverages will pay for your car's repairs or, if it's found to be a total loss, the actual cash value, minus the deductible amount you choose.  If you have both coverages on your policy, you'll need to choose a deductible amount for each.

When shopping for low cost car insurance, you’ll find deductible amounts options for physical damage coverages vary by car insurance company and by state.  For example, in New Jersey, the default deductible is $750 for collision and comprehensive, but you can choose a deductible higher or lower than this amount if you wish.

Common deductible amounts chosen by drivers are $250, $500, or $1,000, but amounts higher and lower may be options.

UMPD deductible

Uninsured motorist property damage covers your vehicle, up to the stated limits, if it’s hit by an at-fault uninsured driver.

UMPD is required in eight states, optional in 19 states and not even offered in all other states.   If you already have collision coverage, then UMPD isn’t normally needed, unless your state mandates it, since collision will cover your car for this situation.

In many states, your UMPD coverage will come with a standard deductible amount – usually ranging from $100 to $300 -- that you must pay if you place a claim.   

For example, UMPD is required in Vermont and comes with a $150 deductible.  West Virginia also requires drivers to purchase uninsured motorist property damage coverage but with a $300 deductible.

PIP deductible

In no-fault states, PIP is required.  In some other states it's an optional coverage.  PIP is used as your primary medical coverage if you’re injured in an accident, regardless of who caused the accident. 

Depending upon state laws, personal injury protection may come with a deductible.  PIP deductible choices vary by state.

For example, in Florida car insurance companies can offer deductibles of $250, $500, or $1,000 for PIP coverage.  New Jersey auto insurers offer drivers PIP deductible options of $500, $1000, $2,000, or $2,500.   

Keep in mind when you have different options for deductibles, for any type of coverage, that if you choose a higher one you should get a reduction in your premium for that coverage.  If you choose a lower deductible, the premium will be higher. 

I’d recommend choosing a deductible that is high enough to save you money, but small enough so that you could come up with the amount if you needed to make a claim.

Once you decide which coverages, limits and deductibles are right for you, you can comparison shop with multiple companies and find the best car insurance rates for your personal situation.

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