What Is a Comprehensive Deductible?

Auto insurance is used to protect the owner of a vehicle from the costs associated with its replacement or repair due to vandalism, theft, accidents or collisions. Whenever a person must file a claim for comprehensive payment from an auto insurance company, the car owner typically must pay for a portion of the expenses, known as a deductible.

Significance

Comprehensive deductibles are related to comprehensive auto insurance companies. Comprehensive auto insurance pays for damages or theft in which the insured is determined to be not at fault.

Identification

The comprehensive deductible is an amount predetermined by the insurance company for claims and is disclosed in the insurance policy. Comprehensive deductibles typically range between $500 and $2,500.

Calculations

When the amount of the claim is determined, the insurance company subtracts the comprehensive deductible from the amount. For example, if a $10,000 claim had a $500 deductible, the insurance company would pay for $9,500 of the repairs or replacement, and the car owner would be liable for the remaining $500.

Benefits

Insurance companies assess comprehensive deductibles in an effort to keep costs down for the insurance company, which allows the company to charge lower premiums to customers.

Considerations

In some cases, it is more advantageous to not file a claim. This is the case when the deductible is more than the cost of the repairs, which may be the case for a minor theft or a chip in a windshield.