Do I have to pay a deductible if I hit a car?

If you hit someone’s car and they file a claim with your car insurance company under your liability insurance, you won’t have to pay a deductible for their payout. However, if you file a collision claim with your provider for the damages to your own vehicle, your deductible will be subtracted from your payout.

Do I have to pay deductible if not at fault? If someone hits my car, who pays?

Car insurance deductibles have nothing to do with who is found at fault and are one of the conditions of receiving an insurance payout from your provider after filing a claim.

What does $500 deductible insurance mean?

In car insurance terms, a $500 deductible means you agree to pay the first $500 of any damages out-of-pocket in exchange for an insurance payout from your provider.

Is it better to have a $500 or $1,000 deductible?

With the $500 deductible, you'll have lower out-of-pocket costs in case of an accident but higher monthly premiums. With the $1,000 deductible, your monthly premiums will be lower, which can save you money over time if you don't have many accidents—but you'll be on the hook for a higher out-of-pocket cost in case of an accident. This policy could also be risky if you can't afford to pay out the deductible on short notice.

Car Insurance Deductibles: What They Are and How to Save

Written by Megan Lee and 3 others

Updated Feb 19, 2025

A deductible is what you pay out of pocket for a loss before your insurance covers the rest. Most deductibles are around $500, but they can range from $0 to around $2,500.

When you file certain car insurance claims, you’ll pay a set portion of the loss, called your deductible, before your insurer steps in to covers the rest. Most deductibles are $500 or $1,000, but your provider may offer different options depending on your budget and

What is a car insurance deductible?

A deductible is the amount you pay out of pocket before your insurance covers the rest of a claim. Most deductibles are around $500 or $1,000, but they can range from $0 to as high as $2,500 (or more) depending on your provider and policy.

Deductibles serve two main purposes:

Discourage small or unnecessary claims that could drive up costs for everyone.
Share claim costs between you and your insurer.

Read more about how insurance companies calculate premiums.

When deductibles apply

Not every type of car insurance coverage requires a deductible. Knowing when they apply can help you avoid surprises when you file a claim.

Coverage that typically requires a deductible

You’ll usually pay a deductible for these coverages, although rules can vary by state:

Collision coverage: Repairs your vehicle after an accident with another car or a stationary object (like a light pole).
Comprehensive coverage: Covers non-collision damage such as theft, vandalism, severe weather, falling objects or hitting an animal.
Personal injury protection (PIP): Pays medical expenses and lost wages for you and your passengers after an accident. It may also cover funeral costs.
Uninsured motorist property damage (UMPD): The portion of UM/UIM coverage that repairs your car after an accident with an uninsured driver.

Coverage that usually doesn’t require a deductible

These coverages generally pay out without you having to pay a deductible:

Your liability coverage: Pays for the other driver’s property damage or medical bills when you’re at fault.
Another driver’s liability coverage: Pays for your damages when the other driver is at fault.
Medical payment (MedPay): Covers medical expenses for you and your passengers after an accident, regardless of fault.
Uninsured motorist bodily injury (UMBI)/Uninsured motorist (UM): Covers medical expenses if you’re hit by an uninsured driver.

Learn more about the major types of car insurance

How deductibles are collected

A deductible is either paid out-of-pocket or subtracted from your final payout. Here’s how each one works.

Option 1: Pay your deductible to the repair shop

If your claim involves repairs, your insurer may pay the shop directly, minus your deductible. When your vehicle is ready to be picked up, you will cover that remaining balance yourself.

So, say you back into a lamppost, causing $2,500 in damage. Your full coverage policy’s collision deductible is $500. The insurance company sends $2,000 to the repair shop, leaving a $500 balance on the account. When you go to pick up your car, you’ll pay the remaining $500 to the shop.

Option 2: Subtract your deductible from a direct payout

If your insurer writes you a check directly — like if your car gets totaled or you decide not to complete repairs — the company can simply subtract your deductible from the total.

For example, pretend a tree limb totals your car, which had an actual cash value (ACV) of $17,500 at the time of the incident. Your comprehensive deductible is $500 so your insurer sends you a $17,000 check, which covers your car’s ACV minus your deductible.

Deciding whether to file a claim

Unlike health insurance, car insurance deductibles apply each time you file a claim. Depending on the damage and who is at fault, there may be times when you decide that a claim actually isn’t worth it.

If the damages far exceed your deductible, a claim usually makes sense, even with a potential rate increase.
If the repair costs less than your deductible, filing isn’t worth it. You’ll pay out-of-pocket and may see higher premiums.

Who pays the deductible after an accident?

The policyholder — not the other driver — is responsible for paying the deductible on their own policy when filing a claim. Your insurer then covers the remaining repair or replacement costs.

What if you can’t afford your deductible?

If you can’t cover your deductible, you may have to pay for repairs yourself. This might mean arranging a payment plan with your repair shop or delaying repairs if the damage is minor and not a safety concern.

What if the repair costs less than your deductible?

If the damage to your car costs less than your deductible, filing a claim usually isn’t worth it. You’d pay the full amount out-of-pocket and may see your premiums rise. However, if the cost of repairs is well above your deductible, filing a claim typically makes sense, even after factoring in possible premium increases.

Choosing the right deductible

The best car insurance companies usually offer several deductible options, but the choices vary widely.

For example, The General may offer only two options, topping out at $250 in some states, while Safeco offers up to seven deductible levels, some as high as $5,000 (depending on your state).

When choosing your deductible, consider:

State insurance requirements.
Your past insurance costs.
Your savings and ability to cover a higher deductible.
Whether you have high-risk drivers in your household.

Need to Know
A $0 deductible car insurance plan — aka “zero-deductible insurance” or “no deductible car insurance” — is typically reserved for drivers with excellent credit and clean driving records. The same goes for vanishing deductible discounts, or incentivize-based coverage that rewards drivers who avoid accidents and tickets. And while California and Massachusetts drivers can add a collision damage waiver (CDW)to their auto policy that pays their collision deductible if an uninsured driver strikes them, CDWs aren’t widely available.

Higher deductibles mean lower premiums

A higher deductible often lowers your premiums because you’re less likely to file small claims. According to the Insurance Information Institute (III), raising your deductible can cut premiums by 15% to 40%.

But higher deductibles aren’t always cost-effective.

For older cars, a high deductible may leave you with little payout.
If you can’t cover your deductible in an emergency, it’s not worth the rate savings.

Most drivers find that a $500 to $1,000 deductible balances affordable premiums with manageable out-of-pocket costs..

More: How to save money by comparing car insurance quotes

NEED TO KNOW: You can change your deductible when you purchase or renew your car insurance policy.

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FAQ

Do I have to pay a deductible if I hit a car?

If you hit someone’s car and they file a claim with your car insurance company under your liability insurance, you won’t have to pay a deductible for their payout. However, if you file a collision claim with your provider for the damages to your own vehicle, your deductible will be subtracted from your payout.
Do I have to pay deductible if not at fault? If someone hits my car, who pays?

Car insurance deductibles have nothing to do with who is found at fault and are one of the conditions of receiving an insurance payout from your provider after filing a claim.
What does $500 deductible insurance mean?

In car insurance terms, a $500 deductible means you agree to pay the first $500 of any damages out-of-pocket in exchange for an insurance payout from your provider.
Is it better to have a $500 or $1,000 deductible?

With the $500 deductible, you’ll have lower out-of-pocket costs in case of an accident but higher monthly premiums. With the $1,000 deductible, your monthly premiums will be lower, which can save you money over time if you don’t have many accidents—but you’ll be on the hook for a higher out-of-pocket cost in case of an accident. This policy could also be risky if you can’t afford to pay out the deductible on short notice.

If your car is new or otherwise worth a lot of money, you may want to consider a lower deductible to protect your investment. Even minor accidents can be costly for high-end vehicles, and a lower deductible reduces your unexpected out-of-pocket expenses.

As long as you can afford it, aren’t a high-risk driver, and don’t drive a new or a luxury vehicle, it’s generally better to choose a higher deductible because it reduces your insurance premiums.

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Megan Lee

Megan Lee is an editor, writer, and SEO expert who specializes in insurance, personal finance, travel, and healthcare. She has been published in U.S. News & World Report, USA Today and elsewhere, and has spoken at conferences like that of NAFSA: Association of International Educators. Megan has built and directed remote content teams and editorial strategies for several websites, including NerdWallet. When she`s not crafting her next piece of content, Megan adventures around her Midwest home base where she likes to drink cortados, attend theme parties, ride her bike and cook Asian food.

Amy Bobinger

Expert insurance writer and editor Amy Bobinger specializes in car repair, car maintenance, and car insurance. Amy is passionate about creating content that helps consumers navigate challenges related to car ownership and achieve financial success in areas relating to cars. Amy has over 10 years of writing and editing experience. After several years as a freelance writer, Amy spent four years as an editing fellow at WikiHow, where she co-authored over 600 articles on topics including car maintenance and home ownership. Since joining Jerry’s editorial team in 2022, Amy has edited over 2,500 articles on car insurance, state driving laws, and car repair and maintenance.