When it comes to auto insurance, one term that often leaves policyholders scratching their heads is “deductible.” Whether you’re a seasoned driver or a new policyholder, understanding deductibles is essential for making informed decisions about your car insurance coverage. Let’s delve into the world of deductibles and decode what this crucial aspect of insurance means for you. 

What Are Deductibles?  

A deductible is the amount of money you pay out of pocket before your insurance starts covering the remaining costs of a claim. In other words, you are responsible for initiating the claims process. 

How Do Deductibles Help?  

It is essential to understand how deductibles work, especially for Ontario drivers. If you have an accident or damage your vehicle, you will need to pay your deductible first. Once you have paid your deductible, your insurance provider will cover the remaining costs up to the policy limit. Deductibles help share the financial burden between you and your insurer, preventing frivolous claims and keeping insurance premiums reasonable. 

Who Sets Deductibles?  

You choose your deductible when you purchase or renew your car insurance policy. Insurance companies typically offer a range of deductible options, allowing you to customize your policy based on your risk tolerance and financial capacity. Keep in mind that the amount you choose can impact your premium. A higher deductible often results in lower monthly or annual payments, but it means you’ll bear more of the initial cost in the event of a claim. 

Why Aren’t Deductibles Part of the Monthly Premiums?  

You pay monthly or annual car insurance premiums to ensure you have coverage in place, protecting you from significant financial losses. However, the deductible serves as a shared responsibility between you and the insurer. It helps maintain a balance between affordable premiums and the insurer’s ability to provide coverage when you need it. The deductible is your commitment to responsible driving and a safeguard against unnecessary claims. 

When Are Different Deductibles Due?  

There are generally two types of deductibles in car insurance: a comprehensive deductible and a collision deductible. The comprehensive deductible applies to non-collision incidents, such as theft, vandalism, or natural disasters. On the other hand, the collision deductible comes into play when your vehicle is damaged in an accident. Understanding the circumstances under which each deductible applies is essential for making informed decisions about your coverage. 

When Are Deductibles Not Applicable?  

While deductibles are a standard part of car insurance, there are situations where you won’t need to pay one. For example, if you’re not at fault in an accident and the responsible party is identified and insured, their insurance will cover the damages without involving your deductible. Additionally, if the cost of repairs is lower than your deductible, you’ll cover the entire expense without involving your insurance company. 


By choosing a deductible that aligns with your financial comfort level and driving habits, you can strike a balance between affordable premiums and comprehensive coverage. If you ever find yourself in a situation where you need to use your insurance, knowing how your deductible works will empower you to navigate the claims process with confidence. To find out how you can save on Ontario auto insurance, speak directly with one of our professional agents. Your Cayuga Mutual agent will find you the right type of coverage at a great price. You can start today by calling us toll-free at (800) 567-3381