Auto insurance deductibles: Who pays?

Understanding auto insurance deductibles.

There’s an economic concept that lies somewhere between ridesharing, splitting the bill for dinner, and going halfsies. But understanding auto insurance deductibles begins with the notion that your insurance provider actually works with you. Yes, we like to think that when you buy an auto insurance policy, you and Toggle® become teammates. That’s what we call modern auto insurance. We know, because we invented it.

Deductibles are a way for you and your insurance company to “share” the bill if there’s an accident. Some will say it’s more like “splitting” the bill for dinner with a parent who offers to pay the bulk of it (our parent company is Farmers Insurance, which was born in 1928, so we get it). You pay some, Toggle pays some; you get back on the road.

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So, when you sign up for your Toggle Auto policy, the first thing you’ll do is decide the split: how much you would like to pay if there’s a covered loss and your car needs repairs. You pay the first part of the bill, then Toggle picks up the rest. For example, if your body shop charges you $3,000 in repairs and you have a $500 deductible, Toggle would write a check for the remaining $2,500 to pay for the covered loss. Your insurance company most likely has set deductible amounts that you need to choose from (e.g. $250, $500, $1000).

Deductibles encourage people to file claims only for the major stuff, as auto insurance is not meant to handle the minor stuff.

As far as the split goes, you can opt for a lower premium with a higher deductible, which means you pay more of the bill when there’s an accident. Or you can opt for a lower deductible for a higher premium, and then pay less to get your car fixed. It’s your call. When choosing your car insurance deductible, think about how much you can pay for a covered loss without causing a lot of stress in your life. Consider your income, your household budget, your personal savings, and your available credit.

Here’s a good suggestion a lot more people should consider putting into practice: if you stash the deductible amount away in a savings account as soon as you sign the policy, then you’re ready for the day an accident happens. No shock. No awe. No financial surprises. No sad faces. If you want even more financially forward thinking tips, we wrote an excellent blog on that topic.

Now that you get deductibles, you can pick the perfect Toggle Auto Insurance policy with the deductible options that work best for you. Check the full array. Comprehensive Coverage, Collision Coverage, Liability Insurance, Temporary Ride Coverage, New Car Replacement, Side Hustle® Auto—even coverage for your Pet Passenger^TM.

The information included in this blog is for informational purposes only and is not intended as professional or expert advice. It is based on research and the collective experiences of the Toggle Team and has not been verified by any academic institutions, government organizations, or world-renowned scholars, but it does make a lot of sense and we do hope you find it useful. We encourage you to use your own good judgment about what’s appropriate for you.

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