Question: If I have a $500 deductible, what do I pay if the damage is less than that? Will my insurer just pay for the whole thing? 

Answer: If the cost to repair your vehicle after a car accident is less than your deductible amount, then there is no reason to make a claim with your auto insurance company, because it will pay zero — absolutely nothing — toward your car’s repair bill.

For your physical damage coverages of comprehensive and collision, you choose a deductible amount at the inception of your policy — you said yours is $500 — and that is the amount you must pay out before your car insurance benefits will kick in. It is completely your own responsibility to take care of repair costs that are below your chosen deductible amount.

Once repair costs reach your $500 deductible amount, you can make a claim and your collision or comprehensive coverage (whichever coverage the damage falls under) would pay for the repair costs that exceed your deductible amount. That, however, doesn’t mean it’s always wise to file a claim just because your deductible amount had been reached.

Even if the cost of repairs exceeds your deductible amount, you may still want to pay out-of-pocket for the repairs to keep a claim off of your claims history. If the repairs come up to, say, $600 and you can afford to pay out the whole amount, then you probably should. Auto insurers take into account your claims history when determining your car insurance premiums. 

One minor claim under $1,000 may not raise your rates at this time, but if in the near future you have additional claims, then your overall claims activity could cause your rates to rise, or even cause your insurance company to not renew your policy at the end of your term. 

If you are comfortable with paying for minor damages to your car and have the money to cover them, then you may also consider choosing a higher deductible.

However, don’t ever make your deductible so high that you can’t afford it and can’t pay for repairs up to that amount. And you may not be able raise your deductible if you have a lienholder that requires you to keep your deductible at $500 or below.

author image
Penny Gusner
Consumer Analyst/Insurance Expert

Penny has been working in the car insurance business for more than 10 years and has become an expert on procedures, rates, policies and claims. She has seen it all, and working with from its inception, she researches the routine and the bizarre with equal enthusiasm. She has three very active children and a husband with a zeal for quirky cars.