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How to Choose the Right Comprehensive & Collision Deductible That Fits Your Budget

Looking for ways to lower your auto insurance bill? Most people would recommend you to raise your deductible for comprehensive and collision coverage. 

However, depending on your life situation, an increased amount may or may not be the best idea. I’m going to explain why. 

Your deductible is the amount that you’d have to pay if you were to get into an accident or you have to file a claim. 

The easiest and fastest way to lower your premium is to drop comprehensive & collision coverage. Or carry liability only. Most drivers do not want to do that. So, raising your deductible is another option to lower your premium. 

The higher your deductible the less you’ll pay for your premium if you carry both comprehensive and collision coverage. 

A higher one doesn’t always mean super cheap coverage.

Price of auto premiums with $100 to $2,000 deductibles.Note: Illustrated above is the premium price for collision and comprehensive coverage for a 2015 Honda Accord. I have included a $2,000 deductible since you are able to get this option with some insurers. However, $0 pretty much is not an option anymore. In this instance, if you have a $100 deductible the price of collision is $612 while for a $2,000 it is $247. Over $300 in savings per year.

More importantly, it could put you in a difficult position financially depending on your situation.

If you’re in the process of looking for a cheaper premium or looking for ways to lower your current one, consider these steps to choose a one that’s right for you.

Choose the Amount you Can Afford

If you’re living paycheck to paycheck, and rarely put money aside into an emergency fund, choosing a high deductible may not be wisest choice.

While a higher amount may mean a lower bill each month, it could also lead you to deep financial trouble if you were to be involved in an accident.

For that reason, you should choose the option based on what you could afford today should you get into an accident.

Higher deductibles are going to lower your premium because you are taking on more risk. However, no matter the amount, if you file an at-fault claim you most likely will pay for it through higher premiums. 

If a $1,000 deductible would put you out on the street, then you may be better off with a lower one, despite the higher monthly payments for your premium.

On the other hand, if you are a saver by nature, and have a good amount of money put to the side for an emergency, a higher amount may not be such a bad idea.

Remember, a higher amount isn’t always the most affordable option if the amount would bankrupt you.

Showing annual premium price for $100 to $2,000 deductibles for Chevy Truck.Note: Illustrated above is collision and comprehensive premium price for a 2016 GMC Truck. If you have a $100 deductible the price of comprehensive and collision is $1,166 per year. If you have a $2,000 one your premium is only $493 per year. A staggering $600+ in savings or $50 a month. Realize if you have a $2,000 deductible this is the amount you have to pay first when filing a claim.

Difference between a $1,000 and $250 by State

Below is a list of each state with the cost of liability only coverage.

This is the minimum amount you would need to drive legal.

Liability coverage doesn’t have a deductible. Only comprehensive and/or collision coverage.

Included in the list is the amount you would pay, as an example, for coverage with a $1,000 and a $250 deductible.

As you can see there is a significant difference. Which is another place you can look for savings.

I have found many drivers do not even consider raising their deductibles because they don’t know about it or better yet, they aren’t paying attention to their premium.

I have included a search bar if you would like to search for your state. 

StateLiability OnlyCoverage $1,000 deductibleCoverage $250 deductibleDifference
Alaska$426$1,350$1,677$327
Alabama$638$1,772$2,194$422
Arkansas$616$1,717$2,089$372
Arizona$600$1,467$1,782$315
California$723$2,268$2,771$503
Colorado$646$1,598$1,938$340
Connecticut$1,097$2,270$2,555$285
DC$1,054$2,209$2,797$591
Delaware$1,520$2,528$3,021$493
Florida$1,058$2,410$2,680$270
Georgia$743$1,823$2,156$333
Hawaii$386$980$1,187$207
Iowa$403$1,177$1,539$362
Idaho$546$1,369$1,667$298
Illinois$543$1,307$1,649$342
Indiana$633$1,498$1,912$414
Kansas$526$1,372$1,783$411
Kentucky$607$1,641$1,937$296
Louisiana$909$2,626$2,988$362
Massachusetts$866$1,678$2,088$410
Maryland$958$1,795$2,163$368
Maine$513$1,192$1,524$332
Michigan$2,446$3,208$3,819$611
Minnesota$864$1,574$1,962$388
Missouri$506$1,355$1,708$353
Mississippi$639$1,684$1,995$311
Montana$467$1,698$2,189$501
North Carolina$385$918$1,030$112
North Dakota$512$1,475$2,053$578
Nebraska$472$1,269$1,659$390
New Hampshire$587$1,331$1,656$325
New Jersey$1,086$2,377$2,735$358
New Mexico$612$1,513$1,809$296
Nevada$641$1,636$1,891$255
New York$891$1,725$2,095$370
Ohio$579$1,235$1,524$289
Oklahoma$712$2,182$2,717$535
Oregon$1,007$1,697$1,989$292
Pennsylvania$560$1,427$1,772$345
Rhode Island$1,026$2,014$2,417$403
South Carolina$654$1,572$1,859$287
South Dakota$431$1,309$1,766$460
Tennessee$656$1,625$1,949$324
Texas$783$1,983$2,317$334
Utah$629$1,359$1,610$251
Virginia$536$1,275$1,541$266
Vermont$487$1,315$1,591$276
Washington$671$1,516$1,773$257
Wisconsin$578$1,649$2,123$474
West Virginia$669$1,633$2,072$439
Wyoming$410$1,345$1,792$447

The most important aspect of auto insurance coverage is not to file claims.

You should ONLY try and file when you absolutely need to.

Why?

When you file an at-fault claim your premiums will go up by a certain percentage.

This is how insurers recoup their costs.

Plus, if you have a bunch of claims insurers are going to consider you higher risk.

Premium Price by Company and Amount

Below is a table list of top companies offering coverage with the cost of coverage with a $250 and $1,000 deductible.

I have included the whole premium price and not comprehensive coverage only.

Of course this is going to depend on the type of vehicle you drive and the state your reside in.

You can see there is a significant difference in the premium when you raise your deductible from $250 to $1,000.

Typically you are going to see 10% to 20% in savings when you raise your deductible.

If you decide to raise it to $1,500 you could see 40% in savings with comprehensive and collision.

Company$250 deductible for comprehensive$1,000 deductible for comprehensiveDifference
Amica$903$821$82
USAA$865$744$121
Allstate$1,053$865$188
Auto-Owners $1,083$887$196
Erie$1,132$912$219
GEICO$911$769$142
Travelers$1,020$843$177
Liberty Mutual$1,094$911$183
MetLife$1,102$922$180
Ameriprise Financial$1,143$1,002$141
Progressive$811$720$91
Farmers$959$830$130
Hartford$1,085$901$184
Mercury$1,108$925$183
State Farm$916$804$112

Determine the Amount You’d be Willing to Pay Before Filing a Claim

Filing an insurance claim usually means that you’ll be facing an increased monthly premium.

That’s why you may not necessarily choose to file a claim for minor damage, and instead, choose to pay for it out of pocket.

When choosing the correct amount for your situation and budget, you’ll want to think about just how much you’d be willing to pay before opting to file a claim should you get into an accident.

For example, if $750 in damage would lead you to file a claim, you may be better off with a $250 or $500.

On the other hand, if you’d rather pay $750 out of pocket rather than file a claim and face an increase in your monthly premium then a $1,000 may be a better option for you.

Comparing deductible premiums annual cost for 2015 Toyota Camry. Note: Illustrated above are the price of premiums for each amount for a 2015 Toyota Camry. In this instance a $100 is $786 for collision and comprehensive coverage. For a $2,000 the same vehicle costs $339 per year. Which is over 50% in savings annually for your collision and comprehensive policies.

Consider the Vehicle you Drive

Depending on the car you drive a higher deductible may not necessarily mean significant savings on your monthly car insurance premium, particularly with comprehensive policies.

For some cars, increasing your from $250 to $500, or $500 to $1,000 would lead to minimal savings at best.

Paying off the difference in that amount would take years!

In such a case, it would make absolutely no sense to increase your deductible – it would likely cause you to pay more money in the end than you would with a lower one.

Before you opt for a higher deductible, talk to your agent about the car you drive, and run a few rates with various amounts.

If a higher amount would lead to minimal savings with your car, it would make more sense to choose a lower one.

Percentage savings for California, New York, Florida, & Texas for comprehensive coverage.Note: Above is the percentage decrease of your comprehensive policy for 5 states. The amount you save by raising your deductible is going to be slightly different from state to state. In California there is approximately 7% in savings when you raise your from $100 to $250. From $250 to $1,000 is approximately 18%

Don’t Forget to Consider your Age

Just as your age can greatly impact that amount you’ll pay for your monthly premium, it can also impact the amount you’ll save with a higher deductible.

For most middle-aged drivers, a higher amount does not necessarily mean great savings on their auto premium, particularly if you have a clean driving record.

A middle-aged driver might save $20-30 per year at best.

On the other hand, the savings are far more significant for younger drivers.

For drivers that are in their teenage years or their 20’s, a higher amount could mean hundreds of dollars in savings each year.

Obviously, a higher deductible makes more sense for younger drivers.

The Bottom Line

In the end, a higher amount could mean a lower bill – but that doesn’t necessarily mean you’ll save money.

When shopping for a new policy be sure to run a few rate comparisons with varying deductibles. Plus, think about your life situation.

Choose the amount that is both affordable and maximizes the amount you’ll save on your premium.

Greg Fowler
Managing Member of AutoInsureSavings LLC, Greg enjoys writing articles to help drivers save on anything related to automobiles. Travel and enjoying the outdoors are some of his hobbies. The best way to reach him is at Google+ or Facebook Profile.

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