How does an auto insurance deductible work?

A deductible is the amount you pay out of pocket before your insurance covers a claim. For example, if you have a $500 deductible and $2,000 in damage, you pay $500, and insurance pays $1,500.

An auto insurance deductible is the amount you must pay out-of-pocket before your insurance kicks in. For example, if you have a $500 deductible and you incur $1,500 in damages, you'll need to pay the first $500, and your insurance will cover the remaining $1,000.

If you're hit by an uninsured driver, your UM/UIM coverage will cover your medical bills and vehicle repairs, ensuring you're not left with hefty costs despite the other driver’s lack of coverage.

Before committing to a policy, carefully review your deductible options and how it will affect your premium. If you can afford a higher deductible, you might save on premiums but face higher costs if you need to file a claim.