Diminishing deductible for car insurance

What is a diminishing deductible?

A diminishing deductible, also referred to as a vanishing deductible or disappearing deductible, is an option offered by some insurers to reward accident-free or ticket-free drivers. With this option, your deductible decreases or “vanishes” the longer you drive without an accident or violation. This coverage feature can be added to a vehicle’s collision deductible to lower out-of-pocket costs in the event of an accident. To be eligible for this feature at Elephant, all vehicles with collision coverage on your policy must have at least a $500 deductible. This is considered an all-or-nothing coverage option at Elephant, meaning that if you choose to add a diminishing deductible, all vehicles on your policy with collision coverage must opt for a diminishing deductible (vehicles with liability coverage only are exempt).

Diminishing deductible coverage can help to lower out-of-pocket costs

How does diminishing deductible work?

With a diminishing deductible, your insurer will usually reduce your deductible for each policy term in which you remain accident-free. At Elephant, this deductible decrease is typically a set dollar amount depending on whether you have a yearly policy or a 6-month policy. If you add this feature to your coverage at Elephant, you’ll typically see an immediate reduction in your deductible. The deductible will reduce automatically after the policy is bound and will continue to reduce by the set dollar amount for each term that you remain accident-free.

The maximum amount an Elephant customer’s diminishing deductible car insurance could decrease is $500.

Example: Let’s say you purchase a 6-month policy with a $1,000 collision deductible and diminishing deductible is added. Immediately, your collision deductible could reduce to $950. If you remain accident-free for the foreseeable future, the collision deductible would be reduced 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 reduced to $0 if you remain accident-free!

Advantages of Elephant’s diminishing deductible coverage

In the event of an accident, you won’t see a diminishing 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 until that point won’t be undone.

Example: Let’s say you purchase a 12-month policy with a $500 collision deductible with a diminishing deductible added. Immediately, your collision deductible could reduce 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.

Diminishing deductible insurance example

*A diminishing deductible is affected by chargeable and non-chargeable accidents.

How can I add a diminishing deductible to my policy?

The cost for vanishing deductible auto insurance coverage varies depending on your policy details. This feature can only be added at new business and renewal. It can’t be added mid-term. Talk to one of our friendly agents for more information.

Frequently asked questions about diminishing deductible


Why does a diminishing deductible policy cost more?


A diminishing deductible typically costs more because it can help lower out-of-pocket costs in the event of a car crash, which can add up to thousands of dollars depending on the car and the damage done.

Who has diminishing deductible car insurance?


Elephant Insurance offers diminishing deductible car insurance.

Are diminishing deductibles available in all states?


Not every auto insurance company offers diminishing deductibles or may only offer the option in certain states. Elephant offers diminishing deductibles in all states in which we operate.

Get diminishing deductible coverage with Elephant Insurance

Along with our diminishing deductible, Elephant provides quality car insurance, discounted insurance, and other services. Get a quote, or use our Coverage Wizard for customized recommendations.

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