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What Is Zero-Deductible Car Insurance?

Publish Date: September 2015

If you’re buying car insurance, the idea of a zero-deductible policy may hold appeal. After all, you wouldn't have to pay out of pocket after an accident, right?

Actually, the answer is a bit more complex than that. Whether you pay a deductible depends on several factors, including the types of coverage you select for your policy and state laws.

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The Cost of a No-Deductible Policy

For starters, you’ll likely have to pay more for a zero-deductible policy up front, according to the Insurance Information Institute (III). That’s because deductibles are designed as a way for you to share the risk of an accident with an insurer, the III says, and buying a no-deductible policy puts the risk solely on the insurance company. A higher premium for a zero-deductible (or low-deductible) policy is the insurance company’s way of accepting that higher risk.

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Deductibles Are Set for Each Coverage in a Policy

Another thing to know is that a deductible usually applies to each specific coverage on your policy. Typically, you’re able to set the deductible for your collision coverage and for your comprehensive coverage, and zero-deductible coverage may be an option.

When it comes to liability coverage, most insurance companies don’t require a deductible at all, regardless of your coverage selections, says the III.

Some Deductibles Determined by State Laws

On the other hand, you may find that, in some states, a zero-deductible option is not allowed for certain coverages — such as personal injury protection or uninsured motorist property damage coverage. Insurance is a regulated industry, so state law may actually require a deductible on certain coverages.

Bottom line: You may be able to choose some zero-deductible coverages, automatically have no deductible for other coverages, or be legally required to pay a deductible on other coverages. Talk with your agent — he or she can help you make the choices that fit your needs and budget.


Coverage subject to terms, conditions, and availability. Policy issuance is subject to qualifications. Allstate Insurance Company, Allstate Indemnity Company, Allstate Fire and Casualty Insurance Company, Allstate Property and Casualty Insurance Company, Northbrook, IL. © 2015 Allstate Insurance Company, Northbrook, IL.
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