What’s a Vanishing Deductible, and Do You Need One?

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A vanishing deductible is an optional feature that some car insurance companies offer. Insurers may call this feature a diminishing deductible, disappearing deductible, or deductible savings bank, depending on the company. It rewards you for safe driving by reducing your deductible for every policy period or year you go without a claim or traffic violation.

Vanishing deductibles are one way to save money on car insurance if you ever need to file a claim. But they also modestly increase the cost of the insurance premium. Since the cost can vary from company to company, it’s best to speak to your insurance agent about adding it to your policy.

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How a Vanishing Deductible Works

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A vanishing deductible rewards you for maintaining a safe and claims-free driving record by lowering your deductible — the amount you pay out of pocket if you file a claim.

Here’s how it works: you start with a standard deductible amount, like $500. For each year you go without filing a claim, part of your deductible is “forgiven,” reducing the amount you would owe if you file a future claim.

Let’s say an insurer offers $100 off for every year you go claims-free. If you start with a $500 deductible and go claims-free for two years, your new deductible would be $300. Your deductible will continue to decrease to the lowest allowable amount — as low as $0 at some companies.

Insurers typically require all drivers on the policy to maintain a claims-free record to qualify. That means no car accidents (and, often, no tickets) within a specified period, usually three to five years. When any driver on the policy files a claim, the deductible resets. This can also happen if anyone gets a ticket.

But vanishing deductibles aren’t available everywhere. Rules and policies differ based on the car insurance company, so always read the fine print when comparing options.

Comprehensive vs. collision deductibles

With most insurers, a vanishing deductible is only available for the collision coverage deductible. That’s the part of your car insurance that covers your car damage if you cause an accident.

But this feature is sometimes extended to the comprehensive deductible — the part of your insurance that covers you in non-collision incidents, such as hail damage, theft, and vandalism.

Insurers that allow you to apply your vanishing deductible for both include:

When available on both collision and comprehensive coverage, your vanishing deductible will only benefit you once before the feature resets. So, if you file a comprehensive claim, your deductible resets to its original amount. If you file a collision claim a few months later, you’ll pay your entire deductible.

Benefits and Drawbacks of a Vanishing Deductible

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Vanishing deductibles may be worthwhile for some but aren’t a great fit for everyone. Consider these benefits and drawbacks before deciding.

Benefits of a vanishing deductible

The vanishing deductible is popular for a reason. Here are the top benefits of adding it to your car insurance policy.

  • Incentive for safe driving: When you receive positive reinforcement for your safe driving behaviors, you’ll usually continue practicing those safer habits, which reduces the likelihood of accidents.
  • Cost savings: If you get into an accident, you’ll pay a lower deductible than you would typically pay without a vanishing deductible.
  • Increased security: A lower deductible may help you feel more financially secure.

Drawbacks of a vanishing deductible

But there are some trade-offs when opting for a vanishing deductible, including:

  • Higher premium: Policies with vanishing deductibles often have higher premiums or are available only as part of a high-end insurance plan.
  • Complexity: The terms and conditions of vanishing deductible programs and how they work might be confusing to some.
  • Deductible reset: If you get a speeding ticket or other moving violation, you may lose access to the benefit.

A vanishing deductible may not make sense for everyone. Plus, it’s virtually impossible to tell if you’ll ever need the feature. If you feel you could possibly file a claim — say you have a new driver behind the wheel — then opting into the vanishing deductible feature can be a good choice.

For some, a vanishing deductible can offer peace of mind. When offered as part of a high-end car insurance package, the vanishing deductible may be one of several desirable features of the policy.

5 Auto Insurance Companies Offering Vanishing Deductibles

The rules and costs of a vanishing deductible vary by company. The table below showcases five insurance companies offering vanishing deductible options.

Company Annual Deductible Decrease Maximum Deductible Reward
Allstate $100 $500
American Family $100 Policy’s maximum limit
Nationwide $100 $500
Progressive $100 Until the deductible reaches $0
Travelers $100 $500


With Allstate deductible rewards, you earn $100 off your collision deductible every year you go without an accident. You’ll get a $100 credit toward your deductible as soon as you sign up. Earn as much as $500 off your deductible after four years of driving accident-free.

American Family

You get a $100 credit when you sign up for the diminishing deductible at AmFam. You’ll continue to earn $100 off your collision and comprehensive deductibles each year you go accident-free, up to your policy’s maximum. If your deductibles are $2,000, you can reduce it to $0 as long as you remain accident-free with AmFam (though it’d take nearly 20 years of accident-free driving).


You can earn $100 off your deductible for every year you go accident- or violation-free — up to $500 in total — with Nationwide’s vanishing deductible option. It’s available for both collision and comprehensive coverage.

When you file a claim, your deductible resets to $100 less than your chosen deductible amount (e.g., $400 for a $500 deductible).


The deductible savings bank at Progressive covers collision and comprehensive deductibles and offers a $50 reduction for every six-month policy period without accidents or violations. You can lower your deductibles to $0 no matter where you set your limit.

But keep in mind that the deductible savings bank isn’t available in Alaska, California, Georgia, Hawaii, New York, or North Carolina.


To get the decreasing deductible at Travelers, you must sign up for the Premier Responsible Driver Plan. You’ll earn a $50 credit to your deductible for every six-month policy term you go without a car accident or major violation ($100 off each annual policy term). The maximum savings allowed is $500.

The premier plan also includes accident forgiveness, minor violation forgiveness, and a total loss deductible waiver, which means you won’t have to pay a deductible if your car is totaled.

This option isn’t available in California.

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Vanishing Deductible Alternatives

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Not everyone will be able to take advantage of a vanishing deductible; for those who can, consider these alternatives before deciding.

Accident forgiveness

An at-fault accident can raise rates by up to 45%, according to Compare.com data. That means accident forgiveness — which ensures rates won’t go up after your first at-fault accident — can offer greater potential savings than the vanishing deductible.

Personal savings

Take the money you would spend on the vanishing deductible and put it in a personal savings account. Earmark those savings for use on a future claim, should the time come. This way, if you never file a claim, receive a ticket, or switch insurers, you keep the extra money you would’ve spent on the vanishing deductible.

Other ways to save

Saving on car insurance premiums means reaching your deductible savings goals faster. Here are some easy ways to get a lower rate.

  • Safe driver discounts: Save up to 30% and put the extra money in your deductible savings account.
  • Higher deductibles: A higher deductible lowers your premiums, making it easier to save for out-of-pocket expenses during a claim.
  • Comparing quotes: Whether you add the vanishing deductible or not, it’s always a good idea to compare auto insurance quotes often. The savings from switching to another insurer may outweigh the savings of a vanishing deductible.

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Vanishing Deductible FAQs

The vanishing deductible isn’t a well-known feature in car insurance, so people naturally have questions. Here are the answers to the most common questions about vanishing deductibles.

Is a vanishing deductible worth it?

It depends on your situation. A vanishing deductible may be worth it if you’re more likely to get into an accident because you drive more often, as it could save you money if you have to file a claim.

But it might not be worth it if you’re a safe driver with a clean driving history since you could be paying for a benefit you’re less likely to use — plus premiums are usually higher with a vanishing deductible.

Are vanishing deductibles the same as accident forgiveness?

No, they’re two different features. Vanishing deductibles reduce your out-of-pocket expense if you have to file an auto insurance claim. Accident forgiveness means the insurer won’t raise your rates after the first at-fault accident within a set number of years.

Do vanishing deductibles prevent car insurance premiums from going up?

No, vanishing deductibles don’t prevent auto insurance premiums from increasing. They reduce the out-of-pocket expense during a claim. If you want lower premiums, consider raising your deductibles. With the vanishing deductible at some companies, you can reduce your deductible down to $0 even if you start at $1,000.

Does every insurance company offer vanishing deductibles?

No. Vanishing deductibles are optional coverage available at a handful of insurers (even some smaller regional insurers), including the following:

Are vanishing deductibles available in every state?

No. While no state prohibits vanishing deductibles, they aren’t available everywhere. Each insurance company has unique rules for how to add it to a policy, and most insurers limit the availability of vanishing deductibles to certain states.


Data scientists at Compare.com analyzed more than 50 million real-time auto insurance rates from more than 75 partner insurance providers in order to compile the quotes and statistics seen in this article. Compare.com’s auto insurance data includes coverage analysis and details on drivers’ vehicles, driving records, insurance histories, and demographic information.

All the quotes listed in this article have been gathered from a combination of real Compare.com quotes and external insurance rate data gathered in collaboration with Quadrant Information Services. Compare.com uses these observations to provide drivers with insight into how auto insurance companies determine their premiums.


  1. Case Studies on Transport Policy, “The transformation of the insurance industry and road safety by driver safety behaviour telematics,” Accessed March 11, 2024.

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