Can Raising Your Deductible Save You Money on Car Insurance?

Jan 16, 2024 1 min read

Yes! If you’re looking to save money on car insurance, raising your auto insurance deductible may lower your monthly premium payment, but there are some things to consider before making the switch. 

Understanding Car Insurance Deductible Amounts

At its most basic, a deductible — the dollar amount “deducted” from a covered loss — is the amount that you agree to pay out of pocket for repairs to or replacement of your covered vehicle after an accident. Here’s how to navigate the various options when it comes to insuring your vehicle.

Car Insurance: Higher Deductible, Lower Premium?

Typically, the higher the car insurance deductible you are willing to accept, the cheaper the premiums will be, as you are assuming more financial responsibility in the event of a claim. Alternatively, if you have a lower deductible, your insurer assumes more financial responsibility and will therefore charge a higher rate for coverage.

Is It Better to Have a $500 Deductible or Higher Deductible?

That depends. If you opt for the lower deductible/higher premium option but never file any claims, you will end up having paid more money over that time in total premium than someone else with a higher deductible. Turning in small claims that are just over a small deductible could also drive premium costs even higher. Alternatively, if you choose a deductible of $1,000 or higher and you end up filing several insurance claims over the course of a few years, you’ll have to pay the deductible amount each time to cover your portion of repair costs. It might seem that a higher deductible is a smarter choice because it avoids premium charges for small, trivial claims and will lower the premium payments. 

Are There Other Ways to Save on Car Insurance?

Before you make the switch to a high-deductible auto insurance plan, consider the various other discounts that might be available to you:

  • With Driveology®, the safer you drive, the more you save. Savings start immediately after you enroll and earn a 10 percent discount just for signing up. Over time, your safe driving habits could qualify you for savings as high as 50 percent.
  • You’ll save time and money when you bundle your car and home insurance with our Farm Bureau Member’s Choice policy. Plus, you’ll have the convenience of one policy, one premium and just one deductible for all your covered possessions. 
  • If you insure more than one car in your household, you can bundle and save. When you add multiple cars to your Farm Bureau Member’s Choice policy, you could earn lower rates for each vehicle.
  • If you drive your vehicle 7,500 miles or less annually, you may qualify for a low mileage discount.
Life Changes Fast — Is Your Insurance Keeping Up?

Every year, your local Farm Bureau agent will review your insurance and look for coverage gaps and ways to save. This annual SuperCheck® helps ensure you are receiving all the discounts you qualify for. 

Want to learn more?

Contact a local FBFS agent or advisor for answers personalized to you.