Car Insurance Deductibles and Limits

Your car insurance deductible is the amount you'll pay out of pocket before your insurance kicks in. The lower the deductible, the less you'll pay out of pocket if an accident occurs. Selecting a higher deductible may lower your car insurance premium.

For example, if you choose a $1,000 deductible and have an accident causing $2,000 in damage, you would pay the first $1,000 of a covered loss before insurance kicks in.

What are Limits of Liability?

Your car insurance coverage limit, also referred to as limit of liability, is the most your insurance will pay if you have a claim. Choosing a higher coverage amount provides you additional protection if an accident occurs.

The available coverage limits may vary by coverage type and state. It is important to choose limits that meet your needs.

Even More Protection with a Personal Liability Umbrella Policy

You may want to consider additional liability coverage over and above the basic limits in your car insurance policy. For example, if you're in a serious accident involving medical bills or litigation, umbrella insurance pays after you have used up the underlying car insurance. Policies provide $1 million in additional coverage, as a starting point.