What’s A Diminishing Deductible For Car Insurance?

Depending on your vehicle insurance deductible, car accidents might cost you hundreds or even thousands of dollars. This can put a strain on your finances.

However, there is a way to avoid having to pay a large deductible. Several insurance companies offer decreased deductibles as a reward for drivers who are accident-free or have not been convicted of traffic offenses.

What is a Decreased Deductible?

The amount deducted from your insurance check if you file a claim is known as a “deductible.” Deductibles are common in a collision and comprehensive insurance policies. If you have a $500 insurance deductible and a $5,000 claim settlement, your insurance check will be $4,500.
However, if you have a decreasing deductible, that $500 deductible might be reduced to zero if you have been a safe driver for a certain length of time.
A “vanishing” or “disappearing” deductible is another name for a reducing deductible. It’s an optional coverage that incentivizes you to drive safely. As you avoid accidents and maintain a clean driving record, the cost of your policy’s deductible drops. The amount and length of “good driving” will depend on which auto insurance company you use.

Here’s an illustration

Assume you have a $500 deductible and your insurer offers a declining deductible plan that reduces your deductible by $100 each year you keep a clean driving record. You may save up to $300 on your deductible if you have had a clean driving record for three years. If you file a collision or comprehensive insurance claim, only $200 of the $500 deductible will be removed from your insurance payment.
The table below displays the typical claim amounts for collision and comprehensive claims across the United States. The insurance check would be $4,101 if the collision damage was $4,601 and you had a $500 deductible. You would owe $200 and the insurance check would be $4,301 if you had a decreasing deductible and received a $300 credit off your $500 deductible.

Deductibles are dropping.

It’s crucial to understand the criteria and eligibility conditions before adding a declining or vanishing deductible to your vehicle insurance policy. Here are a few examples of requirements you can come across.
a spotless driving record

Most insurers require a clean driving record to include a decreasing deductible provision in a policy (meaning no at-fault accidents). For example, all drivers on the AARP Auto Insurance Program from The Hartford must have a clean driving record for three years to add declining deductible insurance.

Limitations on insurance claims

A decreasing deductible usually only allows for one claim before it resets (meaning you’ll have to start over and your deductible will drop based on your policy plan). You can only use the lower deductible once, regardless of how many drivers are on your policy. When you use a declining deductible from National General Insurance, for example, the deductible is reset to the original, full deductible amount.

Reset with a deduction

If you make certain policy modifications, your deductible will normally be reset to the original, full amount. If, for example, you take away comprehensive and collision coverage and then add it back later, Direct General puts the deductible back to what it was before.

Insurance Companies That Provide a Lower Deductible

It’s vital to keep in mind that different auto insurance providers may have varying criteria and prices for a decreasing deductible. Here are a few illustrations.
Allstate. By purchasing the Allstate Safe Driving Bonus coverage to your policy, you can obtain deductible awards for your Allstate auto insurance. You’ll get $100 off your collision deductible the day you sign up, plus another $100 off each year you keep a clean driving record (up to $500) with this benefit.

Family in the United States. When you have the declining deductible from American Family, your collision and comprehensive coverage deductibles are decreased by $100 for every year you don’t submit a claim. For every six months, they go without filing a claim, drivers with six-month coverage will see their deductible drop by $50.


Erie auto insurance’s declining deductible program is included in the Erie Auto Plus package. The comprehensive or collision deductible will be reduced by $100 for each consecutive year of no claims, up to a maximum of $500. It’s worth noting that Erie only sells insurance in 12 states, so it might not be accessible in your area.


Liberty Mutual is a mutual insurance company. This firm offers a “deductible fund” in which you donate $30 from your premium each year and Liberty Mutual contributes $70. Every year you keep a clean driving record (up to $500), and your deductible is reduced by $100. If you file a claim, the money in the fund is used to decrease the amount you have to pay out of pocket.


MAPFRE’s coverage includes diminishing deductible credits. They aren’t advertised as a bonus. You will receive deductible credits after one year of accident-free driving. For the first four years of safe driving, you will receive a $50 discount. Your deductible is reduced by $100 in the fifth year, for a total deductible reduction of $300. MAPFRE only sells insurance in 14 states, so options are restricted.

General National

Every claim-free annual renewal earns you a 25% credit on your collision and comprehensive deductibles with National General’s declining deductible program. Your policy has a $0 deductible after four years of no claims. If a collision and comprehensive claim are paid, the credit is lost.


Nationwide vehicle insurance offers a vanishing deductible as an optional policy feature. You get $100 off your deductible (up to $500) for each year you have a good driving record.

Progressive. Progressive vehicle insurance’s Deductible Savings Bank coverage deducts $50 from your collision and comprehensive deductible for every six months you are an accident- or violation-free. You might be able to reduce your deductible to $0.


Safeco Insurance is a company that provides insurance. Safeco vehicle insurance offers a decreasing deductible as part of the Superior auto coverage level. Every year you have a clean driving record (up to $500), which lowers your vehicle insurance deductible by $100. Accident forgiveness and new car replacement are also included in this policy level.


Travelers’ Insurance is a type of insurance that covers you while you With Travelers auto insurance, the Premier Responsible Driver Plan has a decreasing deductible. For every six months, you go without an accident, you get a $50 credit toward your deductible (up to $500).
Decreased deductibles aren’t available from every vehicle insurance company, and they may only be available in certain states.
For Good Drivers, there are alternative insurance savings.

If you don’t qualify for a decreasing deductible or don’t want to pay the extra money, there are probably other methods to save money on your vehicle insurance premium if you’re a safe driver.

Insurance depends on usage

Usage-based auto insurance keeps track of your driving habits, such as speeding, hard stops, distance, and cell phone usage. This can be done with a device plugged into your vehicle’s OBD-II port, a smartphone app, or built-in systems (such as OnStar or Connected Drive).
Safe drivers are rewarded with usage-based auto insurance. For example, Allstate’s Drive wise program offers up to 10% cashback when you join and up to 25% cashback after six months of safe driving. Completing safe driving challenges earns you points with Allstate.
Depending on the automobile insurance company, discounts for usage-based auto insurance might range anywhere from 5% to 40%. Some firms that provide usage-based automobile insurance include:
Drivewise is a service offered by Allstate.
KnowYourDrive is a program offered by American Family Insurance.
Farmers’ Message
DriveEasy by Geico
RightTrack is a service provided by Liberty Mutual Insurance.
MAPFRE’s DriveAdvisor is a service provided by the company MAPFRE.
SmartRide is a nationwide program.
Snapshot of Progressive
IntelliDrive for Travelers
RightTrack is a Safeco product.
State Farm’s Drive Safe & Save program is a great way to save money on your car insurance.

Discounts for safe drivers

Insurers prefer safe drivers, and some may give you a discount if you have a clean driving record. A responsible driving” discount might range from ten percent to forty percent.
Geico’s Five-Year Accident-Free Good Driver Discount is an example. With this discount, drivers with a five-year clean driving record can receive up to a 22% discount on most coverage options.
Aside from safe driver discounts, insurance companies offer several other discounts on auto insurance:
Full-time students who maintain outstanding grades might save money on insurance through good student discounts. Other sorts of student auto insurance discounts may also help you save money.
When you pay for your insurance policy in full, you get a discount called a “full payment discount.”
When you pay your auto insurance premium on time, you get a discount for being a responsible payer.
When you have two or more vehicles in your household on one insurance policy, you can save money with multi-vehicle discounts.

Multi-policy discounts help you save money on other forms of insurance, such as homeowners, renters, condos, boats, motorcycles, or RV insurance, in addition to vehicle insurance.
When you take a defensive driving course, you might save money on your auto insurance.
When you set up automatic payments for your bill, you may be eligible for reductions.

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