What Is a Deductible in Car Insurance

If you’ve ever looked closely at your car insurance policy, you’ve probably come across the term “deductible.” But what exactly does it mean—and how does it affect what you pay when something goes wrong?
At Ron Johnston Insurance, we believe in making insurance simple, clear, and personalized. Whether you’re a first-time driver or renewing your auto coverage, understanding how deductibles work is essential for making informed decisions about your protection and your wallet.
This guide breaks down what a deductible in car insurance is, how it works, and how to choose the right deductible for your needs—with expert advice from one of Ontario’s leading insurance brokers.
Related Article: What Is a Regular Car Insurance Quote?

What Is Deductible in Car Insurance?

A deductible is the amount of money you agree to pay out of pocket before your insurance coverage kicks in after a claim. It’s a fixed dollar amount set in your policy.

Example:

Let’s say your car gets damaged in an accident, and the repair cost is $3,000. If your deductible is $500, you’ll pay the first $500, and your insurance company will cover the remaining $2,500.

Why Do Deductibles Exist?

Deductibles serve two main purposes:

1. They help control insurance costs.
   Higher deductibles often lead to lower premiums (the amount you pay monthly or yearly for coverage).
2. They reduce small claims.
   Insurance companies use deductibles to avoid processing minor claims, which keeps administrative costs down and policies affordable for everyone.

Related Article: How to Reduce Car Insurance in 2025

Types of Car Insurance Deductibles

In Ontario, your car insurance policy may include several different types of coverage, and not all of them have the same deductible rules. Here’s a breakdown:

1. Collision Coverage

• Covers damage to your vehicle from a crash (regardless of who’s at fault).
• The deductible applies almost every time you make a collision claim.

2. Comprehensive Coverage

• Covers damage from non-collision events: theft, vandalism, falling objects, weather damage, etc.
• Usually has a deductible, though sometimes lower than collision.

3. Direct Compensation – Property Damage (DCPD)

• Covers vehicle damage if someone else is at fault in an accident.
• No deductible typically applies in Ontario.

4. Optional Coverages (e.g., glass repair, rental car coverage)

• May come with or without a deductible, depending on the insurer and plan.

Related Article: Does Insurance Cover a Stolen Car?

How Does Your Deductible Affect Your Premium?

Generally, the higher your deductible, the lower your premium—and vice versa.

Choosing a higher deductible means you’re taking on more risk in exchange for savings. It’s a trade-off, and it should match your financial comfort zone.

What Happens When You File a Claim?

When you submit a claim involving a deductible, here’s what to expect:

1. Your insurer assesses the damage and confirms it’s a covered incident.
2. You pay your deductible amount.
3. Your insurance covers the rest—up to your policy limits.

If the repair cost is less than your deductible, your insurance won’t pay anything—and it usually makes more sense to handle small repairs yourself.

Situations Where You May Not Pay a Deductible

There are cases where you might not have to pay your deductible:

• You’re not at fault in a collision (and the other driver is insured).
• The damage falls under DCPD coverage in Ontario.
• Your comprehensive claim involves minor glass damage, and your policy includes full glass protection.
• Your insurer offers deductible forgiveness (a feature some policies include for long-time clients or first accidents).

At Ron Johnston Insurance, we walk you through these options so you understand exactly what you’re covered for—and what you’ll owe if something happens.

Choosing the Right Deductible: What to Consider

When deciding on a deductible, ask yourself:

Can I afford the out-of-pocket cost?

If you choose a $1,000 deductible, make sure you have that available in savings in case of a claim.

How likely am I to make a claim?

If you have a clean driving record, drive infrequently, or have secure parking, you might feel comfortable with a higher deductible.

Do I want to lower my premium?

Raising your deductible can lower your premium—but only if you’re confident you won’t need to file frequent claims.

Do I want peace of mind?

A lower deductible makes paying for repairs less stressful, especially for new drivers or those who’ve had recent accidents.

Deductibles and Bundled Insurance

If you bundle your auto, home, or life insurance policies, you can unlock even more savings on premiums—without necessarily increasing your deductible.
At Ron Johnston Insurance, we specialize in custom coverage packages that allow you to maximize protection and minimize cost. Bundling your insurance can make managing your policies easier, and we’ll help ensure all deductibles and coverages are aligned with your goals.

How Ron Johnston Insurance Helps You Choose Smart

When you work with us, you get more than just a policy. You get:

• Personalized advice on choosing deductibles and coverage limits.
• Access to multiple insurance providers so you can compare rates and benefits.
• Support during claims and emergencies with fast responses and real help.
• 24/7 support and a user-friendly digital platform to manage your account.
• Options for bundling home, life, travel, and auto insurance—all with one trusted brokerage.

Common Questions About Car Insurance Deductibles

Understanding deductibles can be tricky, especially with different coverages and claim situations. Here are some quick answers to common questions drivers often ask.

Is a deductible the same for every claim?

No. Your deductible may vary depending on the type of claim (collision, comprehensive, etc.).

Can I change my deductible?

Yes. You can adjust your deductible at renewal or when updating your policy—just contact your broker.

What if someone else is driving my car?

If they’re listed on your policy or have your permission, your coverage and deductible typically still apply.

Final Word: Don’t Overlook the Deductible

It’s easy to focus on monthly premiums, but your deductible plays a big role in what your insurance actually costs when it matters most.
A smart deductible choice balances your budget, your risk level, and your peace of mind. Whether you want lower monthly costs or less out-of-pocket in a claim, Ron Johnston Insurance helps you build a policy that works for you.
If you need help reviewing your auto insurance or understanding your deductible options, contact us today for a no-obligation consultation. We’ll make sure you’re protected, informed, and confident every kilometre of the way.