How do vanishing or disappearing deductibles work?
A vanishing deductible means your deductible costs go down the longer you stay accident-free. This perk is available from Progressive, Nationwide, and Liberty Mutual, among other insurance companies.
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Daniel Walker
Licensed Auto Insurance Agent
Daniel Walker graduated with a BS in Administrative Management in 2005 and has run his family’s insurance agency, FCI Agency, for over 15 years (BBB A+). He is licensed as an insurance agent to write property and casualty insurance, including home, life, auto, umbrella, and dwelling fire insurance. He’s also been featured on sites like Reviews.com and Safeco. To ensure our content is accura...
Licensed Auto Insurance Agent
UPDATED: Oct 18, 2023
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Advertiser Disclosure: We strive to help you make confident auto insurance decisions. Comparison shopping should be easy. We are not affiliated with any one auto insurance provider and cannot guarantee quotes from any single provider. Our partnerships don’t influence our content. Our opinions are our own. To compare quotes from many different companies please enter your ZIP code on this page to use the free quote tool. The more quotes you compare, the more chances to save.
Editorial Guidelines: We are a free online resource for anyone interested in learning more about auto insurance. Our goal is to be an objective, third-party resource for everything auto insurance related. We update our site regularly, and all content is reviewed by auto insurance experts.
UPDATED: Oct 18, 2023
It’s all about you. We want to help you make the right coverage choices.
Advertiser Disclosure: We strive to help you make confident auto insurance decisions. Comparison shopping should be easy. We are not affiliated with any one auto insurance provider and cannot guarantee quotes from any single provider. Our partnerships don’t influence our content. Our opinions are our own. To compare quotes from many different companies please enter your ZIP code on this page to use the free quote tool. The more quotes you compare, the more chances to save.
On This Page
- Vanishing deductibles are incentives offered by insurance companies that incrementally lower your deductible for accident-free driving over time
- Although vanishing deductible programs vary by insurer, they usually provide drivers with deductible rewards that can be applied toward future claims — sometimes diminishing your deductible completely
- Your vanishing deductible rewards can be reversed if you get into a serious accident or fail to maintain a clean driving record
If you’re a driver with a habit of getting into accidents, you’re probably wondering if there are ways you can save on out-of-pocket expenses the next time you find yourself in a fender bender.
For some accident-prone drivers, vanishing deductibles can be a great way to incentivize good driving habits and reap financial benefits for avoiding collisions over time. In addition, if you’re involved in an accident in the future, disappearing deductible rewards can also help lower your deductible (that is, the amount of money you pay out-of-pocket before your insurance company pays out their share after an accident).
However, despite their benefits, vanishing deductibles might not be right for everyone. In this article, we’ll look at vanishing deductibles, how they work, and which drivers can benefit most from the incentives they offer.
What is a disappearing deductible?
A vanishing deductible (sometimes called a disappearing deductible) is a program offered by some insurance companies to provide financial incentives to customers for accident-free driving.
When you add vanishing deductible coverage to your auto insurance policy, your insurance deductible will incrementally decrease the longer you drive without getting into an accident. Like its name implies, depending on the terms of your policy, your deductible could even diminish completely over time.
How Vanishing Deductibles Compare to Accident Forgiveness
Although they’re sometimes mentioned together, vanishing deductibles and accident forgiveness plans are different incentives offered by insurance companies. Vanishing deductible coverage offers lower deductibles over time for accident-free driving, while accident forgiveness incentives promise to “forgive” your first at-fault accident by not raising your premiums.
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How do disappearing deductibles work?
Vanishing deductible reward amounts and other details vary by insurance company. However, many programs include similar features. Customers can earn deductible rewards (deductible credits) immediately, annually, or at the end of each policy period.
For each year or policy period you remain accident and violation-free, the insurer will apply additional credits toward your deductible (usually $50 to $100). If you file a claim in the future, your entire deductible credit will automatically be applied to your deductible. In most cases, deductible credits don’t have cash value.
As long as the feature is active on your policy, most vanishing deductible credits never go lower than $100. However, if the feature is removed, the insurance company will typically reduce any earned deductible credits to $0.
Some insurers restrict deductible rewards to collision insurance deductibles, while others allow credits to apply toward both collision and comprehensive insurance deductibles.
Which insurance companies offer disappearing deductibles?
Although vanishing deductible incentives aren’t necessarily limited to any specific insurance companies, several major insurers offer vanishing deductible programs.
The Hartford Disappearing Deductible
Offered through AARP, The Hartford’s optional disappearing deductible program offers a reduction in your collision deductible for each year you maintain a clean driving record. Unfortunately, The Hartford’s website doesn’t list how low your deductible can go.
Allstate Deductible Rewards
Under the Allstate vanishing deductible program, the company will apply $100 toward enrolled customers’ collision coverage immediately and lower your deductible by another $100 each year you’re accident-free, up to $500.
Nationwide Vanishing Deductible
Customers enrolled in Nationwide’s vanishing deductible program will see their collision or comprehensive deductible lowered by $100 for every year of safe driving (up to $500).
Progressive Deductible Savings Bank
Drivers enrolled in this optional incentive program can see their collision and comprehensive deductibles reduced by $50 for each policy period that’s claim and violation-free to $0.
Liberty Mutual Deductible Fund
Although this isn’t technically a vanishing deductible, enrolled customers can reduce their deductible by $100 each year. When enrolled customers pay $30 toward this program as part of their annual premium, Liberty Mutual will contribute $70. The combined total can then be credited toward out-of-pocket expenses in the event of a future accident.
While the incentive programs above are widely available to drivers in several locations across the U.S., other insurers in your area could offer vanishing deductibles. If you’re interested in adding vanishing deductible coverage to your auto insurance policy, shop around and compare quotes with our free comparison tool below.
Will disappearing deductibles lower my monthly insurance rates?
Vanishing deductibles only apply to your collision or comprehensive insurance, which are typically sold as a part of full coverage auto insurance. Because rates vary widely between drivers and insurers, it can be smart to shop around and compare quotes before selecting auto insurance.
This table shows the average monthly cost of collision and comprehensive insurance by state.
Average Monthly Collision and Comprehensive Auto Insurance Rates by State
| State | Average Monthly Collision Insurance Rates | Average Monthly Comprehensive Insurance Rates |
|---|---|---|
| Alabama | $31.70 | $14.61 |
| Alaska | $32.26 | $12.32 |
| Arizona | $27.19 | $17.35 |
| Arkansas | $31.27 | $19.61 |
| California | $40.30 | $7.89 |
| Colorado | $27.54 | $22.70 |
| Connecticut | $33.96 | $11.16 |
| Delaware | $29.41 | $11.71 |
| District of Columbia | $44.66 | $19.06 |
| Florida | $30.15 | $12.44 |
| Georgia | $34.03 | $14.69 |
| Hawaii | $29.82 | $8.97 |
| Idaho | $21.89 | $11.65 |
| Illinois | $28.25 | $11.71 |
| Indiana | $23.87 | $11.30 |
| Iowa | $21.05 | $17.89 |
| Kansas | $23.94 | $23.03 |
| Kentucky | $26.04 | $13.72 |
| Louisiana | $40.62 | $20.71 |
| Maine | $24.57 | $9.44 |
| Maryland | $35.17 | $13.97 |
| Massachusetts | $36.71 | $12.26 |
| Michigan | $39.93 | $13.26 |
| Minnesota | $22.15 | $17.20 |
| Mississippi | $31.01 | $19.95 |
| Missouri | $26.29 | $18.08 |
| Montana | $23.64 | $25.50 |
| Nebraska | $22.71 | $21.75 |
| Nevada | $30.55 | $9.94 |
| New Hampshire | $27.28 | $9.88 |
| New Jersey | $34.53 | $10.86 |
| New Mexico | $25.94 | $17.84 |
| New York | $38.15 | $15.05 |
| North Carolina | $28.51 | $11.45 |
| North Dakota | $23.29 | $21.40 |
| Ohio | $25.21 | $10.90 |
| Oklahoma | $28.89 | $22.33 |
| Oregon | $23.38 | $8.91 |
| Pennsylvania | $31.35 | $14.10 |
| Rhode Island | $39.55 | $11.70 |
| South Carolina | $26.51 | $17.26 |
| South Dakota | $20.37 | $27.26 |
| Tennessee | $29.58 | $13.65 |
| Texas | $36.91 | $22.49 |
| Utah | $25.77 | $10.63 |
| Vermont | $27.46 | $12.32 |
| Virginia | $26.34 | $12.35 |
| Washington | $26.05 | $9.85 |
| West Virginia | $29.18 | $18.74 |
| Wisconsin | $20.66 | $13.32 |
| Wyoming | $24.80 | $26.44 |
| United States average | $31.47 | $13.99 |
Although vanishing deductible rewards can help lower the out-of-pocket expenses you have to pay after your next accident, adding vanishing deductible coverage to your auto insurance policy won’t affect your monthly rates.
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Is it worth it to enroll in a disappearing deductible program?
Deciding whether it’s worth it to pay more for vanishing deductibles depends on your driving history and financial situation. For example, if you’re a high-risk drivers or use your vehicle often, paying more for vanishing deductibles could be worth it if you’re in an accident in the future.
However, if you’re a safe driver or don’t operate your vehicle very often, the added cost of adding vanishing deductibles to your auto insurance policy might not be worth it.
If you’re someone who doesn’t drive very often and is looking for ways to save money on car insurance, you might want to consider a pay-per-mile car insurance policy. Pay-as-you-go policies are based on the number of miles you drive and can save you money if you aren’t frequently behind the wheel.
Who needs disappearing deductibles?
Vanishing deductibles are optional features offered by some insurance companies that incentivize safe driving. Most vanishing deductible programs provide enrolled drivers with credits that lower their deductible each policy period or year they’re claim- and violation-free.
But, despite their benefits, vanishing deductibles aren’t for everyone – drivers who are more prone to getting into accidents can benefit most from vanishing deductible programs.
Careful drivers with clean driving records and no prior insurance claims might not benefit much from the incentives offered by vanishing deductibles — paying for the extra coverage could be a waste of money.
However, if you’re a driver with a history of filing accident-related claims, adding vanishing deductible rewards to your auto insurance policy could be worth the additional cost of paying for your next accident.
Frequently Asked Questions
How much does vanishing deductible insurance cost?
While adding vanishing deductible coverage to your car insurance policy is usually affordable, the cost can vary depending on the driver and insurer. To find the best vanishing deductible rate, shop around and compare quotes.
Who should add vanishing deductible coverage to their insurance policy?
Vanishing deductibles aren’t necessarily right for everyone. For example, drivers with clean driving records might not benefit from the added expense of a vanishing deductible. However, if you have a history of filing accident-related insurance claims, a vanishing deductible could save you money on out-of-pocket expenses in your next accident.
Will a vanishing deductible prevent my rate from increasing if I’m at fault in an accident?
Vanishing deductible coverage usually won’t protect you from a rate increase if you’re involved in an at-fault accident. However, you might consider adding accident forgiveness to your policy if you want incentives to prevent accident-related rates or premium increases.
Are vanishing deductibles available for all types of insurance policies?
Vanishing deductibles are more commonly found in auto insurance policies, although some companies may offer them for other types of policies, such as homeowners insurance. It’s best to check with your insurance provider to see if this feature is available for the specific policy you are interested in.
What are the advantages of a vanishing deductible?
- Incentive for maintaining a claims-free record: Vanishing deductibles encourage policyholders to be more cautious and responsible to avoid making small or unnecessary claims, leading to potentially lower premiums in the long run.
- Financial benefit over time: If you remain claim-free, your deductible decreases each year, reducing your out-of-pocket expenses in the event of a claim.
Are there any disadvantages to a vanishing deductible?
- Higher initial premium: Policies with vanishing deductibles often have slightly higher premiums compared to policies with fixed deductibles, as the potential for a lower deductible is factored into the pricing.
- Limited availability: Not all insurance providers offer vanishing deductibles, so your options may be limited when selecting a policy.
- Claim impact: It’s important to note that if you do file a claim, your deductible may reset to the original amount, and you would need to start accumulating claim-free years again to benefit from the vanishing deductible feature.
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Daniel Walker
Licensed Auto Insurance Agent
Daniel Walker graduated with a BS in Administrative Management in 2005 and has run his family’s insurance agency, FCI Agency, for over 15 years (BBB A+). He is licensed as an insurance agent to write property and casualty insurance, including home, life, auto, umbrella, and dwelling fire insurance. He’s also been featured on sites like Reviews.com and Safeco. To ensure our content is accura...
Licensed Auto Insurance Agent
Editorial Guidelines: We are a free online resource for anyone interested in learning more about auto insurance. Our goal is to be an objective, third-party resource for everything auto insurance related. We update our site regularly, and all content is reviewed by auto insurance experts.