Deductible

Definition
The deductible is the amount payable by the insured before the insurer starts to pay the claim. For example, a car damaged in a collision might have a $500 deductible and no damage under that would be covered. Any amounts over that, would have $500 deductible taken off any claim payment. A $750 claim would be paid $500 by the insured and $250 by the insurance company. The insured might not be willing to submit a claim that small considering the effect a claim would have on their insurance rates.

Do you always pay a deductible?
Some insurance companies now offer a disappearing deductible. If you do not have a claim for a certain number of years, then each year you will see the deductible decrease. Eventually it disappears. Of course, when you do have a claim, it comes back on your renewal or replacement if it is a total loss.

Fire, lightning and theft resulting in the loss of the entire vehicle can result in a zero deductible.

Raise your deductible = save money. Is this true?
A deductible can be a tool to help reduce your insurance costs. Many property insurers will give 15-20% discount up to the first $200 if you increase the usual $500 deductible to $1000. Be aware though that if there is a claim then you will pay $1000 instead of the $500.

Deductible as a tool?
Collision coverage is a tool to bring in the expertise of the insurance company in handling a third party claim. A third party claim is when someone else has injured you or your property. In the case of automobile insurance, if you do not carry collision coverage then the insurer has no duty to defend. This means you are on your own dealing with the at fault driver's insurance company. One way to give you that defense, is to carry a large deductible on that vehicle.

Insurance answer
Consider your risk. What you cannot control, you might choose to manage with insurance. The insurance you choose, should suit your financial position for deductibles.