What’s a Good Collision Deductible?

Last Updated on December 7, 2022

Choosing a collision deductible is personal. You must consider your budget, ability to make a sudden payment, likelihood of a loss, and aversion to risk, among other factors.

The average driver has a collision deductible of $500, and most drivers have a deductible between $250 and $1,000. However, some drivers choose lower or higher collision deductibles.

Keep reading to find out everything you need to know about collision deductibles – including what the best collision deductible is for your unique needs.

Table of Contents:

Most Drivers Have a Collision Deductible of $250 to $1,000

According to insurance industry statistics, the average driver has a deductible of $500, with most drivers falling within the $250 to $1,000 deductible range.

Collision deductibles tend to be higher than comprehensive coverage deductibles. Collision deductibles apply to accidents with other drivers, property, and people, and they tend to have higher repair costs. Comprehensive deductibles can apply to everything from broken windshields to stolen vehicles, and having a high comprehensive coverage deductible limits the value of your coverage.

Considering your monthly budget, aversion to risk, vehicle value, and other factors, you can ensure your policy has the best possible collision deductible.

How Collision Deductibles Work

To make a claim under your auto insurance collision coverage, you need to pay a deductible. This is the amount you pay before insurance covers the remaining repair costs.

Here’s how a deductible works for collision coverage:

  • Collision coverage is part of a standard full coverage car insurance policy (along with liability coverage and comprehensive coverage).
  • Collision coverage compensates you for the cost of repairing or replacing your vehicle after hitting a vehicle, object, or person.
  • Let’s say your vehicle has $5,000 of damage after an accident and you have a collision coverage deductible of $500. You pay the $500 deductible, and your insurance covers the remaining $4,500 for repairing your vehicle to pre-loss condition.
  • Most drivers have a collision coverage deductible between $500 and $1,000.
  • The larger your deductible, the lower your monthly insurance premiums will be – but the more you’ll pay for each accident.

High Deductibles Versus Low Deductibles: Pros and Cons

Some drivers like high collision coverage deductibles because they save money. Others like low collision coverage deductibles for peace of mind:


High Collision Deductibles: Some drivers like having a high collision coverage deductible because they’re confident in avoiding accidents. They’re also comfortable making a sudden payment of $1,000 or higher to cover their deductible. Plus, they like saving money on monthly premiums. A high deductible could reduce insurance premiums (your monthly insurance payments) by 2.5% to 10%.

Low Collision Deductibles: Other drivers like having a low collision coverage deductible. They like the peace of mind of knowing an accident will “only” cost them $250 to $500 in out-of-pocket costs, for example, and they’re okay with paying slightly higher premiums for that peace of mind. Other drivers are more likely to get into accidents – say, if they have a high-risk driver on their policy. This makes it more beneficial to choose a low collision coverage deductible.


High Collision Deductibles: The downside of a high collision deductible is that you’ll pay considerably more when making a claim. If you need to make two or more claims within five years, you could wipe out any savings you received on your insurance premiums. High collision deductibles also dissuade you from making a claim for smaller accidents and lighter damages. You may find yourself paying out of pocket for fender benders, scratches, scrapes, and other damages – even when these damages cost $500 to $1,000 to repair and would normally be worth an insurance claim.

Low Collision Deductibles: The downside of a low collision deductible is that you’re paying slightly higher monthly insurance premiums. You could pay 2.5% to 10% higher premiums for a low collision deductible. The other downside is that you could be motivated to make more collision coverage claims, which raises insurance in the long run. With a deductible of $250, for example, it may be worth making a claim for minor damages that you would normally pay out-of-pocket, and making multiple collision claims in a 5-year window can lead to higher premiums.

Factors to Consider When Choosing your Deductible

Choosing a deductible is personal. Some drivers are better off with a $250 deductible because of their budget, vehicle value, and the likelihood of an accident. Other drivers are better off with a $1,000 deductible because they drive exclusively in low-risk situations and have a higher-value vehicle with costly repair costs.

Factors to consider when choosing your collision deductible include:

Can You Afford an Emergency Deductible Payment? The most important thing to consider with collision deductibles is your ability to make the deductible payment. If you were involved in a car accident today, would you be able to afford a sudden payment of $500? If so, a collision deductible of $500 may work for you. Some drivers set their deductibles higher to save monthly premiums, only to realize they cannot afford a sudden collision deductible payment of $1,000 or higher.

What is the Actual Cash Value of Your Vehicle? Consider the value of your vehicle when assessing your deductible. If your vehicle is worth only $3,000 and your deductible is $1,250, then it will rarely be worth it to make an insurance claim. Your vehicle would need to have a specific amount of damage to make your deductible worth it and avoid being declared a total loss. On older vehicles or low-value vehicles, it’s often better to drop collision coverage altogether.

What is your Monthly Budget? How Much Do You Want to Spend on Insurance? If you have a tight budget, you may want to lower insurance premiums as much as possible. Having a high collision deductible could reduce premiums by as much as 10%. Instead of paying $1,800 per year ($150 per month) for full coverage car insurance, you could pay $1,620 per year ($135 per month).

Does Your Insurer Offer Diminishing Deductibles or Other Perks? Some insurers offer diminishing deductible add-ons and similar perks. You may need to pay a small extra fee to add these perks to your plan. Or, they may be available to all customers automatically. A diminishing deductible program could reduce your deductible by $100 for every year you go without making a claim. This could give you the savings of a high deductible plan without the high deductible.

Do You Anticipate Making Many Collision Claims? What is Your Risk of an Accident? The insurance industry assumes the average driver makes a collision claim roughly once every 17 years. However, roughly 40% of drivers never make an insurance claim in their driving career. And 70% of Americans will get into at least one car accident in their lifetimes. It’s impossible to predict the future. However, you can make an educated guess by considering your driving habits, past driving behavior, daily commute, local accident statistics, and other factors. If you anticipate a higher risk of collision claims, you may be better with a low collision deductible.

Final Word on Collision Deductibles

The average car insurance deductible is $500, and most drivers have a collision deductible between $250 and $1,000. Generally, a good collision deductible is any deductible within that range. You can adjust your deductible based on your predicted accident risk, monthly budget, and ability to make a sudden payment, among other factors.

Consider your vehicle value and insurance needs to determine a good collision coverage deductible. Then, contact your insurer to adjust your deductible.

James Shaffer
James Shaffer James Shaffer is a writer for InsurancePanda.com and a well-seasoned auto insurance industry veteran. He has a deep knowledge of insurance rules and regulations and is passionate about helping drivers save money on auto insurance. He is responsible for researching and writing about anything auto insurance-related. He holds a bachelor's degree from Bentley University and his work has been quoted by NBC News, CNN, and The Washington Post.
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