What Deductible Should You Choose for Collision Insurance?

Choosing a deductible is one of the most important decisions you make when setting up your auto insurance. It directly affects both your monthly premium and how much you’ll pay out of pocket if you need to file a claim.

For collision coverage, your deductible is the amount you agree to pay toward repairs if your vehicle is damaged in an accident. Your insurer covers the rest, up to the vehicle’s actual cash value. But how do you know if you should choose a $500 deductible or a $1,000 one, or even more? The right answer depends on your financial comfort zone, your driving habits, and the value of your car.

What Is a Deductible, Really?

Think of the deductible as your financial skin in the game. If you’re in a collision and repairs cost $6,000, here’s what would happen based on your deductible:

With a $500 deductible, you pay $500 and the insurer pays $5,500
With a $1,000 deductible, you pay $1,000 and the insurer pays $5,000

A lower deductible means a higher monthly premium. A higher deductible lowers your premium, but increases your out-of-pocket cost if you file a claim.

Tip: Choose a deductible amount you could comfortably pay on short notice. Accidents are unexpected, and you’ll need access to those funds quickly.

How Deductibles Affect Your Premium

The deductible you choose has a direct impact on your insurance cost. Insurers charge lower premiums when you take on more of the risk. Here’s a general look at how changing your deductible could affect what you pay:

Deductible Amount	Effect on Premium	Best For
$500	Higher premium	Drivers who want minimal out-of-pocket costs
$1,000	Lower premium	Drivers who want to save on monthly costs and can absorb a higher one-time hit
$1,500+	Lowest premium	Drivers with strong emergency funds and infrequent claims

Premium savings vary by insurer and vehicle, but the difference can be hundreds of dollars per year.

When to Consider a Higher Deductible

You might benefit from choosing a higher deductible if:

You rarely drive or have a clean driving record
Your vehicle is not high-risk or heavily financed
You have an emergency fund or savings set aside
You’re looking for ways to reduce your monthly premium

Over time, a higher deductible can add up to meaningful savings if you don’t make frequent claims.

Note: If you do file a claim and aren’t prepared to pay the higher deductible, it could delay repairs or leave you in a financial pinch.

When a Lower Deductible Makes More Sense

Sometimes, paying more for a lower deductible is the smarter move—especially if:

You live in a high-traffic area where accidents are more likely
You don’t have much in savings
You’ve recently financed or leased a car and need repairs covered quickly
Peace of mind is more important to you than cost savings

You’re paying a little more each month for the security of knowing you’ll owe less in an emergency.

Your Deductible Should Fit Your Life

There’s no perfect number that works for everyone. Choosing the right collision deductible is about trade-offs: cost now versus cost later, convenience versus risk. Look at your budget, driving habits, and the value of your car.

A well-matched deductible can save you money, reduce stress after an accident, and help your coverage fit your financial life—not just your car.