If you are having trouble paying your car insurance deductible after an accident, what do you do? You likely need your car repaired as quickly as possible so you can get back to work and life. You might be wondering how to avoid paying car insurance deductible when you can't afford it.
The best thing to do is to prevent this situation from ever happening. You should adjust your deductible until you can afford it so you'll have the money to cover it. But if it's too late, and you need to pay a deductible you currently can't afford, you do have options.
What Is a Car Insurance Deductible?
According to Progressive, a car insurance deductible is the amount of money you have to pay before your insurance company will cover the rest of the costs. For example, if you require $4000 to repair your car after an accident and you have a $500 deductible, then you will pay $500 before your insurance company will pay the remaining $3500.
Having a lower deductible usually means you pay higher premiums each month and vice versa—having a higher deductible generally decreases your monthly premium costs.
Sometimes you find yourself in a situation where you cannot afford your deductible. In this article, we explore everything you need to know if you get yourself caught in a situation where you cannot afford your deductible.
How Can I Avoid Paying a Car Insurance Deductible?
To get your insurance claim money, you will need to pay your deductible. If you don't have the money right now, you might choose to not make a claim. For example, if your car is functional after an accident and merely has cosmetic damage, you might take your time to file a claim. That way, you can save up the deductible money before you make a claim. Here are your options when you cannot afford your deductible:
- Choose not to file a claim until you have the money.
- Check your policy, as you may not have to pay up front.
- Work out a deal with your mechanic.
- Get a loan.
Check Your Policy
It is always important to know the details of your policy when it comes to deductibles. According to AutoInsuranceQuote, some insurance companies do not require you to pay your deductible up front. These companies are willing to subtract your deductible straight from your claim money.
For example, if your claim is valued at $10,000 and your deductible is $500, your auto insurance company will write you a check for $9500. That is the amount of your claim minus your deductible.
In this case, you will not need to pay your deductible before having any repairs done. If you are uncertain about your policy, ask your insurance agent if you are required to pay your deductible up front.
Talk With Your Mechanic
In some rare cases, says Car Insurance Comparison, a mechanic might be willing to waive your deductible completely. Though it is unlikely, it is worth asking your mechanic if this is an option. This practice is not illegal, so you should not feel uncomfortable asking. The mechanic could be making so much money off the repairs that the shop is willing to waive the deductible or let you make payments over a longer period. For example, you could work out an agreement where you pay your deductible off in monthly installments.
In this situation, the mechanic would charge the insurance company for the cost of the repairs, subtracting the deductible. The body shop would then allow you to make payments to cover the remaining part of the bill or waive your deductible in full. The mechanic basically covers the deductible for you, and then you pay the shop back.
However, if you don't make the payments to cover the rest of your deductible, the mechanic has the legal right to possess your vehicle until you pay it off.
Keep in mind, it is illegal for your mechanic to overcharge your insurance company in an attempt to recoup a waived deductible. That would be considered insurance fraud, according to AutoInsuranceQuote. It is also illegal for the mechanic to use aftermarket parts while charging the insurance company for company direct parts to avoid paying the deductible. Asking a mechanic to do this for you could land you in jail, causing you to lose far more than money and a car.
Get a Loan
Lastly, you can choose to get a loan such as a payday loan to cover the deductible, says Car Insurance Comparison. Though the interest rates can be very high, payday loans do not require a credit check, and you can get money within 24 hours.
You'll be able to pay off your deductible and get the repairs finished. Then, take the time to save up money and pay off your loan.
In Conclusion: Lower Your Deductible
Your insurance won't be very helpful if you cannot pay for your deductible. Ideally, says The Balance, your deductible should be an amount you can easily pay out of pocket when an accident happens. That amount will vary based on your budget and how much cash you have available at any given time.
If your deductible is too high, and you cannot afford it, you can adjust your deductible by paying higher premiums each month. Paying more each month might seem inconvenient, but it can save you a lot of trouble if you get into an accident. You need to be strategic about your deductible and choose the right amount for your situation. Otherwise, your claim will not be processed, and you won't be able to get your car fixed in a timely manner. Not having a car can leave you in a bad financial situation if, for example, you cannot get to work without your car.
Check your policy to make sure you can afford your deductible. If you can't, adjust your monthly premiums until the deductible low enough to be affordable.
Sources:
https://www.4autoinsurancequote.com/blog/what-happens-if-you-cant-afford-your-deductible/
https://www.progressive.com/answers/car-insurance-deductible/
https://www.carinsurancecomparison.com/what-if-i-cant-pay-my-car-insurance-deductible/
https://www.thebalance.com/how-to-choose-your-auto-insurance-deductible-527483
Hearst Autos Research
Hearst Autos Research, produced independently of the Car and Driver Editorial staff, provides articles about cars and the automotive industry to help readers make informed purchasing choices.
