Should I lower my collision deductible?

Asked by: Juana Rohan  |  Last update: January 23, 2026
Score: 4.8/5 (7 votes)

With a lower deductible, your collision coverage may be more likely to cover lower-cost repairs, such as cosmetic damage like dings or dents. With a higher deductible, your insurance typically covers more expensive repairs that affect your vehicle's performance or safety.

Do you want a high or low collision deductible?

In general, drivers who are more likely to file an auto insurance claim will have lower total costs with a low-deductible car insurance plan. Conversely, drivers who don't file a claim will typically save with a higher deductible plan.

Is it better to have a 500 or 1000 deductible?

Generally speaking, yes, a higher deductible is the better choice long term. Especially if you have a good driving history.

When should you drop collision insurance?

If your vehicle is paid off, there are only a few instances that justify dropping collision coverage: Your vehicle's value is less than a few thousand dollars: If your car holds minimal value, collision coverage may not be worth carrying. This is especially true when a large car insurance deductible is involved.

Is it better to choose a lower deductible?

What makes more financial sense, low or high insurance deductibles? There is NO generally speaking rule on this. It is all MATH. If the higher deductible saves enough money to warrant the higher deductible, take the higher deductible. If the savings on a higher deductible is negligible, keep the lower deductible.

Should you drop collision coverage on car insurance?

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How high is too high deductible?

In 2023, health insurance plans with deductibles over $1,500 for an individual and $3,000 for a family are considered high-deductible plans.

What happens if you lower your deductible?

Policies with lower deductibles typically have higher premiums, meaning you'll pay more each month for your insurance coverage. However, if you have a higher deductible, you may be able to save money on your premiums but may be responsible for paying more out of pocket if you need to file a claim.

What is the 10 rule for collision insurance?

One general rule of thumb is to skip collision coverage for vehicles that are more than ten years old. Your collision premiums and your deductible are more than 10 percent of your vehicle's blue book value.

Do I really need collision coverage?

If you wouldn't be able to afford the costs to repair your car, or even more so, buy a new one to replace it, having collision insurance is that added layer of protection that can prevent you from financially being responsible for expensive damages — and that's really important.

How long should you carry collision insurance on a car?

The rule of thumb for dropping collision insurance is to drop it when a vehicle's annual collision premium, plus the deductible, cost more than 10% of the vehicle's current value. Some experts also advise dropping collision insurance when the vehicle is more than 10 years old.

What is the average collision deductible?

Generally, drivers tend to have average deductibles of $500. Common deductible amounts also include $250, $1000, and $2000, according to WalletHub.

Do I get my deductible back if I'm not at fault?

Yes, if you have to pay your deductible and you were not at fault, you may be able to get it back from the at-fault driver's insurance company. This is called subrogation. Your insurance company will pursue the at-fault driver's insurance company to recover the money paid for the damages, including your deductible.

What is the disadvantage of having a higher deductible?

Cons. Higher deductible: If your deductible is higher, it means you are required to pay for your medical care out of pocket up to that amount before your health plan begins to help pay for covered costs. The exception is for preventive care, which is covered at 100% under most health plans when you stay in-network.

Do I have to pay my deductible if someone hits me in Geico?

Generally, when you have Geico collision coverage, an adjuster provides an estimate of damages. This allows the policyholder to go to a body shop, give it the insurer's estimate, and get the car repaired. The policyholder usually needs to pay a deductible.

What is a normal deductible for health insurance?

What is a typical deductible? Deductibles can vary significantly from plan to plan. According to a KFF analysis, the 2024 average deductible for individual, employer-provided coverage was $1,787 ($2,575 at small companies vs. $1,538 at large companies).

Are diminishing deductibles worth it?

Because your collision deductible will decrease over time if you remain accident free, typically vanishing deductibles are worth it to save you money down the road.

At what point does collision insurance stop being beneficial?

You should drop your collision insurance when your annual premium equals 10% of your car's value. If your collision insurance costs $100 total per year, for example, drop the coverage when your car is worth $1,000 since, at that point, your insurance payments are too close to your car's value to be worthwhile.

Why would you not want to have collision coverage?

Collision insurance only pays up to the current market value of your car, minus your collision deductible. Since older cars typically have a low market value, collision coverage won't pay out much, if anything, in a total loss. Be sure to research your car's worth before deciding on whether to drop the coverage.

When to drop full coverage on a car?

You should think about dropping your full coverage insurance policy if:
  1. You drive a high-mileage car. ...
  2. You struggle to fit the cost of auto insurance in your budget. ...
  3. Your car is worth less than the cost of your full-coverage policy. ...
  4. You have relatively high risk tolerance. ...
  5. You rarely drive.

Should I drop collision coverage on my car?

You may consider dropping collision or comprehensive coverage if: Your vehicle's value is low. If your car's value has fallen below a few thousand dollars, it might be time to consider dropping collision and comprehensive coverage. That's especially true if you have a high deductible, such as $2,000.

What is the insurance 5% rule?

In each insurance year you can withdraw up to 5% of the premium paid into your policy without a gain happening in that year. An insurance year begins on the anniversary of the date of your policy was taken out and ends on the day before the anniversary in the next year, except in the final insurance year.

What should my collision deductible be?

How much should your collision deductible be? Collision deductibles vary widely — from as little as $100 to as much as $2,000. Unfortunately, there's no one-size-fits-all answer for how much is the right amount. It depends on your financial situation, driving habits, and what kind of car owner you are.

Is it better to have a higher or lower deductible?

Key takeaways. Low deductibles are best when an illness or injury requires extensive medical care. High-deductible plans offer more manageable premiums and access to HSAs. HSAs offer a trio of tax benefits and can be a source of retirement income.

Can the color of your car affect your insurance premium?

Does car color affect insurance rates? The color of your car doesn't affect your insurance rate. Instead, your insurance company uses other information, like your car's age, location, usage, and your driving record, to help determine insurance rates.