How does a car insurance deductible work?
Short answer: A deductible is the amount you pay out of pocket on a covered claim before insurance pays the rest. With a $500 deductible and $3,000 in covered damage, you pay $500 and your insurer covers $2,500.
Deductibles apply to collision and comprehensive claims, not to liability (which pays others). A higher deductible lowers your premium because you're absorbing more of the risk; a lower one costs more each month but less when you file. The right balance depends on how much you could comfortably cover out of pocket at any given moment.
