How Does An Auto Insurance Deductible Work? 
A deductible is the amount you pay before the insurance company pays . If you have an accident and there is $ 5000 damage to your car . Assuming your deductible is $ 500 , your policy would pay out $ 4500 . This is why sometimes I advise my clients not to turn a claim in . If you have an accident and the damage is $ 600 and your deductible is $ 500 , you could lose more by turning the claim in than by paying the extra $ 100 yourself because of possible rate increases due to the accident . A side note , if you have an agent always call him first for advice . Do not call the company unless it is an emergency . If you call the company and ask them if an incident is covered and then decide to pay for it yourself , the insurance company will log that in as an accident against you , even though they do not pay anything out . A good agent may not say anything to the company if he does n't have to turn in a claim Of course most accidents need reported if there is another person involved but say you back into a tree and damage your bumper . You have $ 600 damage , your deductible is $ 500 , you pay it yourself . No report needs filed . Calling your agent can save you that mark against your record . 