The amount you'll have to pay if you make a first-party insurance claim

When you apply for a comprehensive and collision (first-party) insurance policy, you'll be asked what deductible you want to set.


So what is a deductible, and how does it affect the cost of your insurance policy?


Deductible Overview

Known in other parts of the world as excess, the deductible is the amount that the insured must pay out before the insurer will begin paying.


Deductibles help incentivize drivers to be extra careful with their vehicles, in a way that they might not be if the insurance company covered 100% of the damage.



Deductible Amounts

The most common deductible amount for Comprehensive and Collision coverage is $500, although deductible amounts of $1,000 or $1,500 are not uncommon.

Effects of Deductible Amount on Policy Costs

By selecting a higher deductible amount, you are shifting risk from the insurance company to yourself.


So everything else being equal, selecting a higher deductible amount will lower the cost of your insurance policy.



Deductibles Only Apply to Comprehensive and Collision

Deductibles do not feature in liability coverage - the insurer pays the full cost of the claim.

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