What is zero deductible car insurance?

Zero deductible car insurance allows drivers to trade higher monthly rates for no deductible. Zero deductible car insurance is only applicable for collision and comprehensive coverage.

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UPDATED: Jun 2, 2022

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Written By: Laura BerryReviewed By: Joel OhmanUPDATED: Jun 2, 2022Fact Checked

Here's what you need to know...

  • A deductible is a set amount that the policyholder will have to pay out of his own pocket for repairing his car before the insurance company covers the rest of the claim amount
  • It may be possible to get certain types of insurance coverages, such as collision and comprehensive coverage, without a deductible
  • If you choose to have a zero deductible policy, then you should expect to pay more overall for your car insurance
  • A deductible is one way that the car insurance company tries to share the risk with the policyholder so that the insured does not file any unnecessary claims

Your insurance company might offer a zero deductible option for certain coverages in some limited situations. However, for the basic auto liability policy that every driver is required to have, a deductible really does not apply to your coverage in any event.

A deductible comes into play for your comprehensive and collision coverage, which helps to cover physical damage to your car.

It does not include any coverage for personal injuries from any accident involving your car.

Most of these policies actually require a deductible so that the insured has some skin in the game when filing a claim.

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What is the Point of a Car Insurance Deductible?


A deductible is a way for the insurance company to prevent drivers from making too many claims under their comprehensive and collision coverage for repairs to their cars.

The general idea is that if you have to put out a certain amount of money on your own before filing a car insurance claim, then you will think twice about filing any frivolous claims and having to pay the amount of the deductible out of your own pocket.

Most of the times, the deductible for your car insurance policy will be a set amount that you must pay out of your own pocket before the insurance company picks up the tab for a car repair.

In other situations, the deductible can be set at a certain percentage of the claim.

Most times, when you file a claim under your car insurance policy, the amount of your deductible is simply deducted from the settlement check.

For example, if you have a deductible of $100 and you file a claim for $1,000, you would receive a check for $900 from the insurance company in settlement of your claim. If the deductible was $200, the settlement check would be for $800.

The information in regards to your exact deductible will be set out in your insurance policy agreement.

Look for the amount on the declarations page of your policy.

If you do not have an accessible copy of your insurance policy agreement, your insurance agent should be able to send you another copy and answer any of your questions about your deductible without a problem.

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Information on a Deductible and the Rate You Pay for Car Insurance

If you choose to pay a higher deductible, you could be lowering your car insurance premium by a significant amount.

When you shop around for quotes on car insurance policies, ask about the amount of the deductible and what your options are for raising it to lower the cost of your premium.

You need to think carefully about the amount of the deductible that will work for you because you do not want to be hit with a huge loss when you have to file a claim.

Some states have regulations on the way that your deductible must be identified and described in the policy agreement.

If you have any issues with the deductible that you are required to pay in making a claim, you can contact your state department of insurance.

Deductibles and Your Basic Auto Liability Policy

The way that a basic auto liability policy works is that you are covered for when you are in an auto accident that you cause.

This means that if the other driver is injured or has damage to his or her car, then he or she could file a claim against your insurance company to recover.

In this case, no amount would have to be paid out of pocket for you to have the claim covered.

On the other hand, if your car is damaged by a car falling on it, if you have a deductible from your comprehensive policy, you will have to pay this amount to have the car repaired.

If there happens to be no deductible, which means you would pay a much higher amount for the policy, then you can get a settlement without having to pay out of pocket.

Recap on Zero Deductible Car Insurance

You might think that having no deductible for your car insurance sounds like a great idea because you would not have to pay anything out of your own pocket to have your car repaired after filing a claim.

However, there are other considerations to think about, such as this making your policy premium significantly more expensive.

Also, a zero deductible policy is probably only available for certain types of coverages, such as your collision and comprehensive insurance.

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Editorial Guidelines: We are a free online resource for anyone interested in learning more about auto insurance. Our goal is to be an objective, third-party resource for everything auto insurance related. We update our site regularly, and all content is reviewed by auto insurance experts.

A former insurance producer, Laura understands that education is key when it comes to buying insurance. She has happily dedicated many hours to helping her clients understand how the insurance marketplace works so they can find the best car, home, and life insurance products for their needs.

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Written by Laura Berry
Former Insurance Agent Laura Berry

Joel Ohman is the CEO of a private equity backed digital media company. He is a CERTIFIED FINANCIAL PLANNER™, author, angel investor, and serial entrepreneur who loves creating new things, whether books or businesses. He has also previously served as the founder and resident CFP® of a national insurance agency, Real Time Health Quotes. He has an MBA from the University of South Florida. Jo...

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Reviewed by Joel Ohman
Founder & CFP® Joel Ohman

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