- Option A expected annual cost
- $1,571.43 ($500 deductible)
- Option B expected annual cost
- $1,442.86 ($1,000 deductible)
- Expected saving per year
- $128.57
- Premium difference per year
- $200
- Break-even claim interval
- 2.5 years
Expected cost = premium + (deductible ÷ years between claims), assuming one claim every 7 years. Pick the option whose deductible you could genuinely pay tomorrow.
Expected annual cost
Each option is scored as its premium plus the deductible divided by the expected number of years between claims. If you expect one claim every seven years with a $1,000 deductible, that is roughly $143 a year of expected out-of-pocket cost on top of the premium. Comparing those totals is far more honest than comparing premiums.
Break-even claim interval
Divide the extra deductible you take on by the premium you save each year. If you save $200 a year by moving from a $500 to a $1,000 deductible, the extra $500 pays for itself in 2.5 years of savings. Claim less often than that and the higher deductible wins; claim more often and it loses.
Practical check
Whatever the maths says, the deductible has to be an amount you could pay tomorrow without borrowing. A deductible you cannot fund is not really insurance.
Frequently asked questions
Do I pay the deductible for every claim?
The collision and comprehensive deductible applies once per claim, not per year. Comprehensive claims such as glass are often covered with a lower or zero deductible.
Should I choose the highest deductible available?
Only if you can pay it. Going from $500 to $2,500 typically cuts the physical-damage portion of the premium by 15 to 30 percent, but the saving is meaningless if you cannot settle the bill.
What about windscreen and glass claims?
Many insurers set a separate, much lower glass deductible or waive it entirely. Check whether full glass cover is included before comparing options.