What is diminishing deductible?

Diminishing deductible is sometimes called a “disappearing” or a “vanishing” deductible. It’s a coverage feature that can be added onto a vehicle’s collision deductible to lower the out-of-pocket costs in the event of an accident*. To be eligible, all vehicles with collision added must have at least a $500 deductible. It’s an all-or-nothing coverage, so all vehicles on the policy with collision must opt for the coverage (vehicles with liability-only are exempt).

How does diminishing deductible work?

With the coverage selected, you’ll see an immediate reduction of your deductible amount by $100 for yearly policies or $50 for 6-month policies. The deductible will reduce automatically after the policy is bound and will continue to reduce by $100 (for yearly policies) or $50 (for 6-month policies) each term the you remain accident-free*.

The maximum amount an Elephant customer’s deductible could reduce by is $500.

Example: Let’s say you purchase a 6-month policy with a $1000 collision deductible and diminishing deductible added. Immediately, your collision deductible reduces to $950. If you remain accident-free for the foreseeable future, the collision deductible will reduce by $50/term until it reaches $500. Having reached the maximum reduction amount, the deductible will freeze at $500.

On the other hand, if you choose, for example, a $500 collision deductible, you could have your collision deductible reduce all the way to $0 if you remain accident-free!

There’s one more thing about the way we do diminishing deductible that sets us apart.

In the event of an accident*, you won’t see a reduction in your deductible at renewal. Instead, it’ll remain the same (i.e. freeze) for one term and will continue to decrease following the next accident-free* term. That’s right — it doesn’t reset! All your hard work to remain accident-free up ‘til that point won’t be undone.

Example: Let’s say you purchase a 12-month policy with a $500 collision deductible with diminishing deductible added. Immediately, your collision deductible reduces to $400. If you have an accident during the first term, your collision deductible will freeze at $400 at renewal. It’ll continue to reduce following your next accident-free term.

diagram showing how diminishing deductible works

How can I add diminishing deductible to my policy?

The cost for this coverage is $60 per vehicle per year ($30/term/vehicle for 6-month policies) and can only be added at new business and renewal. It can’t be added mid-term.

*DD is affected by chargeable and non-chargeable accidents.

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