A $500 deductible means a driver would pay less money out of pocket after an accident covered by their car insurance. Say they crash their vehicle and experience $5,000 in damage. They'd have to pay $500 and their insurer would pay $4,500 if they had a $500 deductible. If they had a $1,000 deductible, they'd have to pay $1,000 and the insurer would pay $4,000. This doesn't always mean a $500 deductible is better. People pay higher premiums to get coverage with a $500 deductible instead of a $1,000 one. That means routine insurance costs are higher in exchange for lower costs if an incident occurs. Motorists have to decide if they would rather keep premiums as low as possible but potentially pay more later -- or pay a higher price in exchange for more protection when a problem arises.