You must pay your car insurance deductible for the claim to be complete. In most cases, you don't receive your claim payout without paying your deductible first. If you are unable to pay your deductible at the time of your accident, it is best to wait.
Do not send in your claim to your insurance company if you cannot pay your deductible.
What kind of insurance requires a deductible?
There are two common insurance types that use deductibles:
- Collision Insurance- No matter who's at fault, collision insurance covers your car after an accident.
- Comprehensive Insurance- This insurance covers damage from things outside of your control. This includes fires, floods, and vandalism.
There are two other types of insurance that use deductibles:
- Personal Injury Protection- PIP covers medical bills for you and your passengers. Some states require this type of insurance.
- Uninsured/Underinsured Motorists- This type of coverage protects you when you’re hit by a driver who doesn’t have insurance. This also covers you when their insurance limits can’t cover the full amount of damage.
What deductible should I choose for car insurance?
Always pick a deductible amount that you would feel comfortable paying out-of-pocket. Outside of this, be sure to consider the value of your vehicle. A car that is only worth $1,000 probably isn’t worth getting an $800 deductible for.
Deductibles usually range from anywhere from $200-$2,000. The most common deductible amount is $500. Keep the below ratio in mind when choosing your deductible amount:
- Lower deductible = Higher car insurance rate and lower out of pocket costs
- Higher deductible = Lower car insurance rate and higher out of pocket costs.
Do all car insurance policies require upfront deductible payments?
Filing a claim when you can’t pay your car insurance deductible is a bad idea. However, there are some car insurance companies that don't require upfront payment. Usually, it works one of two ways:
- Your insurance company subtracts the deductible from your claim payout. Let’s say your claim is approved for $2,500 and your deductible is $500. Your insurer writes you a check for $2,000.
- Your insurance company requires the deductible to be paid out of pocket before they complete your claim. Let’s say your claim is approved for $3,000 and your deductible is $500. Your insurer asks you to pay your deductible to your mechanic before they release the remaining $2,500.
Can I avoid paying my deductible?
- Avoid filing your claim immediately. If your car is damaged but can still drive safely, you can always continue to drive it. Once you've saved up your deductible amount, you can then submit your claim.
- Talk to your mechanic- Some mechanics are open to working out a monthly plan. You then pay them monthly until your deductible is paid off. It helps if you have a long-term business relationship with your mechanic and can express an honest need.
- Apply for a loan- Apply for a loan at a bank or ask a family member or friend. While not preferred, asking for help isn’t bad. There's no shame in asking for help when in need. Set up a realistic payment plan and stay true to it.
If you’re in a situation where you can’t pay your deductible there some things you can do. In most cases, you need to find a way to pay your deductible.
When you don't have to pay your deductible
You don’t need to worry about paying a deductible in the following situations:
- It’s not your fault/or an insured driver hits you- When another driver hits you and it’s deemed their fault, their insurance is required to pay your damages. With collision coverage, you can choose to go through your own insurer. Your insurer later seeks reimbursement from the other driver’s insurance.
- Someone files a claim against your liability coverage- In short, there is no deductible in a liability claim. You pay nothing towards any damages or injuries you caused another person up to your policy’s limit. Your insurance pays for the liability claim.
- You chose not to have a deductible- A few states offer the option of selecting a $0 deductible on comprehensive insurance.
- You have free repairs on glass claims- For any glass damage that can be repaired instead of replaced, you may not need to pay a deductible. Some insurance companies (like Progressive) offer this in cases where glass repair is possible.
Paying your deductible is important, let's find the best policy for you!
You should always pick a deductible that you can afford to pay out-of-pocket. If you can’t pay your deductible, you risk not having your claim approved. Your mechanic can also withhold your car until your deductible is paid.
Before that happens, look for an insurance company that doesn’t require an upfront deductible payment.
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