A car insurance deductible is what drivers will pay out-of-pocket for repairs before the insurance kicks in. Deductibles apply only to collision and comprehensive claims. Usually, the higher the deductible is, the lower the premium will be. To help their customers, some insurance companies offer a diminishing deductible for car insurance policies. Also known as “vanishing” or “disappearing” deductible, the diminishing deductible is an additional coverage that rewards safe drivers. Drivers who avoid car accidents and maintain a clean driving record over time will be rewarded with a decreased deductible amount.
Before applying for vanishing or diminishing deductible at the insurance company, drivers should consider the following rules:
Clean driving record. Drivers who want to add a diminishing deductible feature to their policies are required to have a clean driving record with no recorded at-fault accidents for a number of years depending on the insurance company.
Vanishing deductible insurance claim limitations. Typically, a diminishing deductible only allows one claim to be filed and then the deductible will reset. This means the policyholder will have to start over and its deductible will diminish based on the policy plan. No matter how many drivers are on a policy, the vanishing deductible can be used only once.
Deductible reset. Insurance companies will likely reset the deductible, back to the original, full amount if the policyholders make certain changes to the policy. For example, some insurance providers will reset the deductible back to the original amount if the policyholders remove comprehensive and collision coverage and then add it back later on.
Depending on the car insurance company, drivers can purchase a vanishing deductible as an add-on to a car insurance policy, or they can get it as an extra perk. Not every insurance provider offers diminishing deductibles or may only offer it in certain states. Before getting this feature, drivers should know that in the case of an accident, it will not save them from a rate increase. Drivers who are found at-fault in an accident should not be surprised if their rates are increased after renewal.