Diminishing Deductible

A diminishing deductible reduces the deductible you would pay on a collision claim, by a set amount for each year you go without an at-fault accident or violation. It is a carrier feature rather than a coverage, so it is offered by some California insurers and not others.

Because it is a carrier program, the terms are not standard across the market. Four things differ from one insurer to the next, and they decide whether the feature is worth its cost:

• The credit earned per claim-free year, and whether any credit applies as soon as it is added.
• The ceiling on total credit, which caps how far the deductible can fall.
• What happens after a claim, since some programs reset the accumulated credit and some reduce it.
• Whether it carries a premium charge, and how that compares with the credit it builds.

The figures that apply to you sit on your own declarations page and in the endorsement behind it, rather than in any general description. We can read yours and work out what the feature is actually earning against what it costs.

How does it sit alongside California's own discount?

Separately, and it helps to keep the two apart. The Good Driver Discount is a statutory entitlement under Proposition 103, set at a rate at least 20 percent below what you would otherwise be charged, and a qualifying driver has to be sold it. A diminishing deductible is an optional feature a carrier chooses to offer on top of that.

That distinction matters when comparing quotes. The discount is not something one insurer can beat another on, because it is fixed by statute. The deductible feature is, because it is not.

When would the deductible actually come into play?

Whenever collision coverage responds, which is more often than people expect. It includes the case where another driver hits you and leaves, and is never traced, because uninsured motorist property damage requires the vehicle or driver to be identified. Damage to your car then runs through collision and the deductible applies, even though the crash was not your fault.

A total loss deductible waiver is a separate feature some carriers offer, addressing the deductible where a vehicle is declared a total loss. Whether it is on your policy, and what triggers it, is set by the form rather than by a general rule.

Ask us to look at your collision deductible alongside how far you drive and what the car is worth. The deductible you can comfortably fund is usually a better starting point than the one that produces the lowest premium.