Can I Raise My Deductible to Save on Car Insurance?

Last Updated on December 15, 2025

Some insurance experts recommend raising your deductible to save on car insurance. But does raising your deductible actually lower your premium?

In most cases, yes. A higher deductible usually means a lower premium—because you’re agreeing to pay more out of pocket if you file a claim.

Keep reading to learn how deductibles work, how much you can realistically save, and how to decide if a higher deductible is worth the tradeoff.

Key Takeaways

• Raising your comprehensive and/or collision deductible usually lowers your premium, but you’ll pay more out of pocket if you file a claim.
• Deductibles typically apply to damage-to-your-car coverages (comprehensive/collision), not liability coverage.
• The “right” deductible depends on your emergency savings, claim likelihood, and whether your lender caps how high your deductible can be.
• Before you raise your deductible, compare a few options and do a quick break-even check using your real premium savings.

Yes, Raising Your Deductible Can Lower Insurance Premiums

Most insurers will reduce your premium when you choose a higher deductible on comprehensive and/or collision coverage. Common deductible options are often $250, $500, $1,000, and sometimes $1,500 or higher.

The catch is simple: you’ll pay less every month, but you’ll pay more if you ever file a claim. If your premium savings are small—or you’re likely to file claims—the math can work against you.

How Deductibles Work

A deductible is the amount you pay toward a covered claim before your insurer pays the rest (up to your policy limits).

Example: If repairs cost $5,000 and your deductible is $500, you pay $500 and your insurer pays the remaining $4,500.

Deductibles usually apply to comprehensive and collision (the parts of your policy that pay for damage to your vehicle). Liability coverage—damage you cause to others—typically does not have a deductible.

Also, you can often choose separate deductibles: one for collision and one for comprehensive. Some drivers keep comprehensive lower (because glass, hail, and animal claims happen more often) and keep collision higher.

One more important detail: you typically pay a deductible per claim, not per year. Multiple incidents can mean multiple deductibles.

How Much Can You Save by Raising Your Deductible?

Savings vary widely by insurer, state, vehicle, and driver profile. The only way to know your exact savings is to run quotes (or ask your agent) using several deductible options.

To give you a sense of how the tradeoff can look, here’s an example of how premiums may change at different deductible levels (sample full coverage pricing data):

What this means in plain English: Going from a $500/$500 deductible to a $1,000/$1,000 deductible saves about $302 per year in this example. But you’d also be taking on $500 more out-of-pocket cost each time you file a claim.

Quick “break-even” check: Divide the extra deductible by your annual savings. If you raise your deductible by $500 and save $300 per year, you “break even” in about 20 months (if you go that long without a claim). If you have a claim sooner, you may lose money overall.

And remember: premium savings don’t change the fact that filing claims can lead to higher rates later. A higher deductible can also discourage small claims that might not be worth the long-term premium impact.

Should You Raise Your Deductible? Things to Consider

Raising your deductible can be smart—but only if it fits your finances and your risk tolerance. Here are the biggest things to consider:

Chances of Making a Claim: You pay your comprehensive deductible for things like theft, vandalism, hail, and many windshield claims. You pay your collision deductible after an accident. If you’ve filed multiple claims recently, raising your deductible may not be the best move.

Chances of Anyone in Your Household Filing a Claim: If multiple drivers use the car (especially newer drivers), your odds of filing a claim may be higher. More claims + a higher deductible = more out-of-pocket risk.

Your Ability to Pay the Deductible on Short Notice: A high deductible only helps if you can actually cover it when something happens. If paying $1,000–$1,500 would force you into credit card debt, a lower deductible may be worth the higher premium for peace of mind.

Loan or Lease Requirements: If your vehicle is financed or leased, your lender may require comprehensive and collision—and may also limit how high your deductible can be. Check your paperwork before increasing your deductible.

Collision vs. Comprehensive Coverage Deductibles: Generally, comprehensive coverage deductibles are lower than collision coverage deductibles. Some drivers keep comprehensive lower while raising collision higher to balance savings and affordability.

Not-at-Fault Accidents: Depending on how the claim is handled, you may still pay your deductible upfront and then get reimbursed later. Learn more here: does my deductible apply even if I am not at fault?

What You Actually Save: Sometimes raising your deductible barely changes your premium. Always get the exact dollar savings (per month and per year) before you decide.

Paying Monthly vs. Paying in Full: If your goal is cash flow, raising your deductible can reduce monthly bills. But also consider other strategies like paying your premium in full vs. monthly (some insurers charge installment fees).

How to Raise Your Deductible

Raising your deductible is usually quick and can often be done online. Here’s the safest way to do it:

• Step 1: Confirm your loan/lease (if any) allows the higher deductible you want.
• Step 2: Ask your insurer (or agent) for pricing at a few deductible levels (ex: $500, $1,000, $1,500).
• Step 3: Do the break-even math using your real savings.
• Step 4: If you raise the deductible, put the monthly savings into an emergency fund so you can afford it later.

FAQs on Raising Your Deductible to Save on Car Insurance

Final Word

Raising your deductible can lower your car insurance premium—but it’s not “free money.” You’re trading a lower monthly bill for a higher out-of-pocket cost when you file a claim.

If you can comfortably afford the higher deductible and you don’t expect to file claims often, increasing your deductible can be a smart way to reduce premiums. If a higher deductible would strain your budget, sticking with a lower deductible may be the safer move.