Vanishing Deductible FAQs: Everything You Need to Know

Is vanishing deductible in car insurance policy worth it? Find out in this article.

January 4, 20211075 views0

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When dealing with a professional insurance agent, they might want to make you pay more on your premium so that they can walk home with a bigger commission for every car insurance quote they generated for their partners online. In doing so, they would suggest that you buy an additional feature like vanishing deductible whether you have only one or multiple vehicles.

In this article, we shall discuss all the frequently asked questions regarding diminishing deductible and what you need to know.

Here are all the frequently asked questions and their answers about disappearing deductibles.

What is vanishing deductible for auto insurance?

A vanishing deductible for car insurance refers to a program in which your car insurance deductible will decrease each year you’ve been accident-free. It is also known as a disappearing deductible or diminishing. It’s a sort of reward to good drivers.

If you purchased a disappearing deductible alongside your car insurance policy from Nationwide Insurance, you can earn up to $500 if you never got involved in an accident for a period of 5 years.

How does vanishing car insurance deductible work?

Vanishing deductible is an optional feature marketed by car insurance companies that gives you the opportunity to earn $100 off your deductible for each year of safe driving without an accident.

A breakdown of how vanishing deductible car insurance works.

Earn a $100 deductible credit immediately.
The credit applies to both comprehensive and collision.
Every year you remain accident and major violation-free, with no policy lapses, you will receive an additional $100 credit (maximum of $500 credit).
Claims will automatically be settled using the deductible credit and the deductible credit will be reset to $100. It has no cash value and the entire credit will be used in the event of a claim. You do not get to choose when to use your deductible credit, it is not bankable.

The two major car insurance providers in the United States that often advertise vanishing deductibles in their TV commercials are Allstate and Nationwide.

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Is Vanishing deductible worth it in your car insurance policy?

A lower deductible will save you money if you get involved in an accident or make a claim. The thing is, loyalty and safe driving will result in additional deductible savings.

If you don’t drive regularly or have a relatively safe commute with little to no traffic, then your risk of getting into an accident is very low. In a situation like that, a vanishing deductible might not be worth it in those cases.

How much does vanishing deductible increase your car insurance?

The extent to which a vanishing deductible increases your car insurance premium depends on every detail of your policy. This is why it’s very difficult to give an estimate. But the truth of the matter is that an additional policy will definitely increase your car insurance premium.

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Although most insurers offering disappearing deductibles alongside their car insurance policy won’t include this in their commercials, you will be required to pay for it.

Does your state prohibit adding vanishing car insurance deductible?

Before paying for any additional feature in your car insurance policy, you may need to verify from your state insurance commissioner to be sure such a practice is allowed in your state. As a policyholder, you will need to comply with both the insurer’s regulations and those of the state.

Does disappearing deductible cost more if you have multiple vehicles?

We might not be able to answer for all auto insurance companies near you but you can ask the agent of your insurance provider to know if having multiple vehicles can make the additional cost to be more than when you have only one.