Car insurance deductibles can be fairly complicated to navigate. The answer to when you pay is relatively simple. You have to pay a deductible any time you make a claim for your car insurance. The deductible is an agreed-upon amount that you have to pay out of pocket whenever you make an insurance claim before the insurer will cover the cost of damages. Since the deductible is considered first, you have to pay it for every claim you make provided the damage meets or exceeds its amount, as explained by Policygenius. When do you pay the deductible for car insurance exactly? Learn everything you need to know about paying deductibles.
How Do Deductibles Work?
A car insurance deductible is what you have to pay out of pocket to cover damages from an accident before the insurance company covers anything. For example, if you have a $500 deductible, you'll have to pay that $500 out of pocket before your insurer will put a dime toward damages. There's no annual deductible to meet either. The agreed-upon deductible applies every time you file a claim.
There are some instances in which your deductible will cover the entire cost of the damages, according to Progressive. Imagine you have a $1,000 deductible with your policy and you get in an accident that causes $900 worth of damage. Your deductible exceeds the cost of the damages, so you'll have to pay it all out of pocket. With that same deductible, imagine you got into an accident that caused $1,100 worth of damage. In that instance, your insurer would pay you $100.
Deductibles are typically only attached to certain kinds of insurance such as comprehensive and collision. Liability insurance doesn't have deductibles, and personal injury protection doesn't often have a deductible, but it can in some states. Regardless of the kind of car insurance you have a deductible for, they'll all work the same way.
When it comes time to actually pay a deductible, you only have to make an effort if your deductible is higher than the total amount of damages suffered. That effort would be directed toward whatever services you need to repair the damages without strictly involving your insurance company at all. They'd simply deny you coverage in that scenario. Should the damages exceed your deductible, your insurance company will issue you a check for the total amount of damages minus your deductible.
What's a Good Deductible?
There is no single answer to what qualifies as a good deductible. It all depends on the kind of benefits you're looking to get from your car insurance and your overall budget. There are some general rules to keep in mind that can help you decide what kind of deductible works best for your needs.
In general, a lower deductible means you'll be paying more for your insurance premiums. This is because your insurer will have to pay more in the event of an accident. If you opt for a higher deductible, your insurance premiums tend to be lower. Consider how much you're willing to pay out of pocket in the event of an accident. The average deductible is around $500, which is somewhat of a middle ground option, but they can range anywhere from $100 to $2,000 according to Policygenius.
What Coverage Requires Deductibles?
Liability insurance may not require deductibles, but other kinds of car insurance do, according to Esurance. Uninsured motorist coverage may require a deductible, but comprehensive and collision insurance nearly always do. That deductible is typically around $500 to $1,000 and is applied when your vehicle is in an accident and suffers physical damage that needs to be repaired regardless of who's at fault.
Comprehensive coverage protects you from damage your car incurs when you're not driving, such as from falling objects, extreme weather, and vandalism. Make sure you keep comprehensive coverage in mind if you drive any of these commonly stolen cars and trucks.
Deductible Exceptions
Fortunately, there are some instances in which you don't have to pay your deductible. These scenarios are important to keep in mind when you're calculating the appropriate steps to take after an accident. Here are the most important deductible exceptions:
- Another driver is at-fault: If the other driver is at-fault for the accident, you may not have to pay your deductible or anything at all. You could have damages covered by their insurance or by your insurer should they decide to pursue reimbursem*nt from the other driver. The cost of the damage and your deductible would be entirely covered for you.
- Liability claims against you: Should another driver file a claim against your liability insurance, you don't have to worry about paying a deductible out of pocket since liability coverage doesn't deal in deductibles, as explained by Progressive. You may not be entirely covered, however, if the damages exceed your liability policy limits.
- Glass repair: In most states, insurance providers like Progressive will offer free repairs on glass, though windshield glass is its own complex issue. Since these are repairs rather than replacements, they don't go through your insurance policy, meaning your deductible doesn't come into play.
How to Deal With Deductibles
Deductibles are simply an inevitable aspect of numerous kinds of insurance, but they shouldn't stop you from getting the repairs you need after an accident. To get your repairs taken care of in a timely manner, it's always best to make a claim against your own car insurance policy assuming you have the proper coverage, according to HPM Insurance. Keep in mind that this is the best course of action regardless of who's at-fault for the accident.
When you're involved in an accident that's not your fault, you should still file the claim with your own insurance company. Your insurer is always going to want to pay the least amount of money possible, so if they discover you're not at fault, they will pursue reimbursem*nt from the other driver's insurance company. This reimbursem*nt is especially useful as the amount covers your deductible. Just remember that you'll only have your deductible covered for you if your insurer is able to get coverage for the entire cost of the damages from the other insurer.
With these factors in mind, you can find a deductible for your policy that best fits your driving needs from a provider like Progressive. Don't forget that the more time you spend on busy roads, the more likely you'll have to pay a deductible eventually.
Information and research in this article verified by ASE-certified Master Technician Duane Sayaloune of YourMechanic.com. For any feedback or correction requests please contact us at research@caranddriver.com.
Sources:
https://www.policygenius.com/auto-insurance/understanding-car-insurance-deductibles/
https://www.progressive.com/answers/car-insurance-deductible/
https://www.caranddriver.com/news/g29849210/10-most-stolen-cars-trucks/
https://www.caranddriver.com/news/a29214448/gorilla-glass-windshields-pricing/
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.
