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HomeCar Insurance ResourcesHow Do Deductibles Work With Car Insurance? 

One of the most frequently asked questions when obtaining car insurance is the question surrounding deductibles. Many people do not quite understand the deductible aspect when purchasing car insurance. A higher premium or a higher deductible, which is the best plan? There are several answers to this question and it is based on individual needs and financial budgets.

What Exactly Is A Deductible?

When your car insurance provider refers to a deductible, they are referring to the amount of money that you would have to pay yourself should you make a claim. Typically the deductible is a set amount such as $500 or $1000, however, some insurance providers will calculate your deductible as a percentage of the insured amount on the policy. Deductibles are put into place to allow the insurance company and the insured to share the risk. If there were no deductibles, people would make a lot more insurance claims which would highly increase the amount of car insurance costs. People tend to drive a little more cautiously if they know it will cost them money and inconvenience should they get into an accident. Usually, deductibles only apply to damage incurred on your own vehicle for example with collision and comprehensive coverage. 

What Does It Mean When You Have A $1000 Deductible?

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A $1000 deductible on your car insurance policy simply means you are responsible to pay the first $1000 of the repair bill on your vehicle. The insurance company will cover the remainder of the costs. 

Is It Better To Have A $500 Deductible Or $1000?

Choosing a $500 deductible means your premiums will be lower than if you had a $1000 deductible as the insurance company would be paying for more of the coverage. 

What Is The Highest Deductible For Auto Insurance?

The highest deductible for auto insurance in Ontario is approximately $2500. On average people can choose from $250, $500, or $1000 deductible amounts. 

How Do I Get My Deductible Waived?

As a rule, deductibles are only waived when you are not at fault and the at-fault person’s insurance company agrees to pay your deductible. 

Do You Pay A Deductible If You Hit Another Car?

If you hit another car, you will most likely be found at fault and will have to pay your deductible. The Automobile Insurance Act has established a set of guidelines for insurance companies to follow. It is called the Fault Determination Rules. 

Why Do I Have To Pay A Deductible If I’m Not At Fault?


You will have to pay a collision deductible if your vehicle was involved in a hit-and-run accident. You are not at fault however, your claim cannot be covered under DCPD as the other driver cannot be identified by your insurer. 

What If My Damage Is Less Than My Deductible?

If the damage to your vehicle is less than your deductible, it would not make sense to make a claim. You would pay for the repairs out of your own pocket. 

When Am I Required To Pay A Deductible When Filing An At-Fault Claim?

If your insurance company deems you at fault in an accident, you would be required to pay your deductible upon completion of the repairs to the repair company. The repair company would then charge your insurance company the cost of the repairs, less the deductible you paid to them. 

Am I Required to Pay A Deductible When Someone From Another Country Hits My Vehicle and Causes Damage?

Depending on how your car insurance policy was written, typically you would have to pay your deductible for the repairs on your vehicle, then your insurance company would make every attempt to recover it. If they are successful in recovering your deductible amount, you would receive a refund for the amount. 

Does It Make More Sense To Pay A Higher Deductible Or A Higher Premium On My Car Insurance?

The decision to pay a higher deductible or a higher premium is based on an individual’s personal and financial situation. Premiums and deductibles go hand in hand. If you pay a higher deductible, you will pay a lower premium for your policy. However, if you choose to pay a lower deductible, the amount of your premium will be higher. Depending on your financial situation, it may be more beneficial to pay a lower premium and a higher deductible to keep your monthly, semi-annual, or annual payments lower. It is important to keep in mind that if you choose a higher deductible, you will need to have the ability to come up with the full amount should you need to make a claim. 

Do I Have To Pay A Deductible If I’m Found Partially At Fault?

If your insurer finds you partially at fault in an automobile accident you may be required to pay all or a portion of your deductible. It would entirely depend on your insurance policy and how it is written. 

Would I have To Pay A Deductible If My Vehicle Was Vandalized Or Stolen?

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The comprehensive portion of your insurance policy would cover theft or vandalization of your vehicle. However, in this case, you would have to pay your deductible. 

Am I Required To Pay A Deductible For Every Claim I Make?

Many people are under the misconception that they must pay a deductible with every claim they make. This is not necessarily true. If you are found not at fault in an automobile accident, the other party’s insurance company is responsible to pay your deductible. If you are found 100% or partially at fault, you will have to pay a deductible for repairs to your vehicle. 

Who Can Best Advice Me On Car Insurance Deductibles?

The best person to speak to regarding your car insurance deductible is your insurance provider. Insurance agents are highly trained in the industry and can answer all your car insurance questions. Always ensure you fully understand your policy and coverage. If you are unsure about any aspect of the policy, simply ask your agent to explain it to you.

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