How to compare car insurance deductibles with two written quotes
Would you accept a $1,000 collision deductible to save $20 a month? In the example below, the higher deductible saves $240 in a claim-free year. But one covered repair over $490 makes the lower deductible cheaper for that year. Here’s how to find both numbers on your own quotes.
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Put the two quotes on the same calendar
Start with written offers for the same car and drivers. Copy the total premium for the policy term, including fees on the same basis. An installment can include fees or a down payment that makes it a poor guide to the full price. A deductible is the part of a covered loss you pay yourself. California Department of Insurance guide to premiums and deductibles.
- Quote A
- $876 for six months with a $250 collision deductible. Two terms at that price would cost $1,752.
- Quote B
- $1,512 for twelve months with a $1,000 collision deductible. All other coverage and quoted terms match in this example.
These offers are fictional. Annualizing A assumes its second six-month term costs the same as its first. At those prices, B saves $240 per year, or an average of $20 per month. Check the renewal price when it arrives.
What one covered repair does to the annual cost
Add the annual premium to the smaller of the covered repair amount and the applicable deductible. Each row considers a separate year. Assume one covered collision, a repair within policy limits and a flat deductible that applies once. The model excludes later premium changes and any reimbursement from another party.
| What happens that year | Quote A | Quote B |
|---|---|---|
| No claim | $1,752 | $1,512 |
| $180 repair | $1,932 | $1,692 |
| $490 repair | $2,002 | $2,002 |
| $625 repair | $2,002 | $2,137 |
| $2,400 repair | $2,002 | $2,512 |
A $180 repair falls below both deductibles, so the driver pays $180 under either quote. For a $625 repair, A leaves the driver with $250 to cover. B leaves the driver with the full $625. That extra $375 outweighs the $240 premium saving by $135.
The tie occurs at a $490 repair because $490 is the smaller deductible plus one year of premium savings. This shortcut applies when the result falls between the two deductibles. If annual savings exceed the entire deductible increase, even one large covered repair cannot erase all of those savings at the assumed prices.
What if you have two small repairs in one year?
Keep the same quotes and assume two separate covered collisions, each with a $400 repair and its own deductible. After one repair, A costs $1,752 + $250 = $2,002 for the year. B costs $1,512 + $400 = $1,912. The higher deductible still saves $90.
After both repairs, A costs $1,752 + $250 + $250 = $2,252. B costs $1,512 + $400 + $400 = $2,312. Now A costs $60 less, even though neither repair reached the $490 crossover for a single collision. Count the annual premium once and apply the deductible separately to each covered event under the terms of the quote.
How long does it take to break even on a higher deductible?
The maximum extra cash B could require for one sufficiently large covered loss is $750. At $20 saved per month, it takes 37½ months to accumulate that amount, or 38 complete monthly deposits. This savings break-even assumes the price difference persists and you set aside the money.
Suppose you have $600 available for car repairs today. On a $2,400 covered repair, A uses $250 of that reserve and leaves $350. B calls for $1,000 and leaves you $400 short. This is a separate decision from which quote costs less over a full year. Washington’s insurance regulator also ties a higher deductible to having sufficient savings to afford it. Washington Office of the Insurance Commissioner on deductible choices.
When the price difference answers a different question
If Quote B also drops rental reimbursement or cuts a liability limit, its $240 saving reflects more than a deductible change. Ask for a second version with the same covered drivers, vehicle use, limits, optional benefits, discounts and payment method. Inspect endorsements for special deductibles or waivers. Texas Department of Insurance auto shopping checklist.
Compare just one coverage at a time. For damage to your car from hitting another vehicle, find the collision coverage line. If you are testing a theft or hail scenario, check the comprehensive coverage line and its own deductible. A separate covered event can trigger another deductible under the policy terms. Washington guide to auto coverages.
With both offers beside you, enter the written premiums, term lengths and deductibles in the car insurance deductible calculator. Try one repair smaller than your higher deductible and one larger. For each, check both the annual total and what you could pay from today’s repair fund.