Should You Raise Your Deductible? The Math Behind the Trade

Raising your comprehensive and collision deductible is one of the fastest premium cuts available — but it is not free savings. Here is how to run the numbers.

The Typical Trade

Deductible	Annual Premium	Savings vs $500
$250	$1,420	−$180
$500	$1,240	—
$1,000	$1,100	+$140
$2,500	$960	+$280

(Sample rates. Yours will vary.)

When It Makes Sense

• You have at least the deductible amount liquid in savings
• You have not filed a comp/collision claim in 5+ years
• Your vehicle is worth 4x+ the deductible (otherwise consider dropping comp/collision entirely)

When It Does Not

• You would put the deductible on a credit card if you had to pay it
• You drive in high-claim conditions (deer country, hail, high-theft ZIPs)
• Your car is under 3 years old and financed (lender may require a lower deductible)

Rule of Thumb

If raising your deductible from $500 to $1,000 saves you at least $100/yr, take it — as long as you have the $1,000 sitting in savings. The break-even is 5 years without a claim.