Car insurance deductibles can be difficult to understand. The answer to when you pay is straightforward. When you file a car insurance claim, you must pay a deductible. The deductible is an agreed-upon amount that you must pay out of pocket when filing an insurance claim before the insurer will cover the cost of the damages. Because the deductible comes first, you must pay it for every claim you file, provided the damage meets or exceeds the deductible amount, as explained by Policygenius. When do you pay your car insurance deductibles? Learn everything there is to know about deductibles.
Deductibles: How Do They Work?
Car insurance deductibles are the amount of money you must pay out of pocket to cover damages resulting from an accident before the insurance company will pay anything. For example, if you have a $500 deductible, you must pay that $500 before your insurer will pay anything toward damages. There is also no annual deductible to meet. Every time you file a claim, the agreed-upon deductible is applied.
According to Progressive, your deductible may cover the entire cost of the damages in some cases. Assume you have a $1,000 deductible on your policy and are involved in an accident that causes $900 in damage. Because your deductible exceeds the cost of the damages, you’ll have to pay the difference out of pocket. Assume you were in an accident that caused $1,100 in damage and you had the same deductible. In that case, your insurer would compensate you with $100.
Deductibles are usually only associated with specific types of insurance, such as comprehensive and collision. Car Insurance Deductibles are not common in liability insurance, and they can be found in some states for personal injury protection. They all work the same way, regardless of the type of car insurance you have a deductible for.
When it comes time to pay your deductible, you only need to make an effort if your deductible is greater than the total amount of damages sustained. That effort would be directed toward whatever services you require to repair the damages, with no involvement from your insurance company. In that case, they’d simply deny you coverage. If the damages exceed your deductible, your insurance company will pay you the difference between the total amount of damages and your deductible.
What Constitutes a Good Deductible?
There is no single answer to the question of what constitutes a good deductible. It all depends on the benefits you want from your car insurance and your overall budget. There are some general rules to follow to help you decide what type of deductible is best for your needs.
In general, lowering your deductible means paying more for your insurance premiums. This is due to the fact that your insurer will be required to pay more in the event of an accident. Insurance premiums are typically lower if you choose a higher deductible. Consider how much you’re willing to pay out of pocket if an accident occurs. According to Policygenius, the average deductible is around $500, which is a good middle-ground option, but they can range anywhere from $100 to $2,000.
What Kinds of Insurance Require Deductibles?
According to Esurance, while liability insurance does not require deductibles, other types of car insurance do. Although uninsured motorist coverage may have a deductible, comprehensive and collision coverage almost always do. This deductible, which is usually between $500 and $1,000, is applied when your vehicle is involved in an accident and suffers physical damage that must be repaired, regardless of who is at fault.
Comprehensive coverage protects your car from damage caused by falling objects, extreme weather, and vandalism while you are not driving. If you drive any of these commonly stolen cars or trucks, make sure you have comprehensive coverage.
Exceptions to the Car Insurance Deductibles
Fortunately, there are some situations in which you are not required to pay your deductible. These scenarios should be considered when determining what steps to take following an accident. The following are the most significant deductible exceptions:
- If the other driver was at fault for the accident, you may not have to pay your deductible or anything at all. If they decide to pursue reimbursement from the other driver, their insurance or your insurer may cover your damages. You would be completely reimbursed for the cost of the damage and your deductible.
- Liability claims against you: According to Progressive, if another driver files a claim against your liability insurance, you won’t have to pay a deductible out of pocket because liability coverage doesn’t deal with deductibles. However, if the damages exceed your liability policy limits, you may not be completely covered.
- Glass repair: In most states, insurance companies like Progressive will provide free glass repairs, though windshield glass is a separate complex issue. Because these are repairs rather than replacements, they are not covered by your insurance policy, so your deductible is not applicable.
How to Handle Car InsuranceDeductibles
Deductibles are an unavoidable aspect of many types of insurance, but they should not prevent you from receiving necessary repairs following an accident. According to HPM Insurance, it’s always best to make a claim against your own car insurance policy (Car Insurance Deductibles) to get your repairs taken care of as soon as possible. Remember that regardless of who is at fault for the accident, this is the best course of action.
Even if you are not at fault in an accident, you should still file a claim with your own insurance company. Your insurer will always want to pay as little as possible, so if they discover you were not at fault, they will seek reimbursement from the other driver’s insurance company. This reimbursement is especially valuable because it covers your Car Insurance Deductibles. Remember that your deductible will only be covered if your insurer is able to obtain coverage for the entire cost of the damages from the other insurer.
With these considerations in mind, you can find Car Insurance Deductibles for your policy from a provider like Progressive that best suits your driving needs. Remember that the more time you spend on congested roads, the more likely you will have to pay a deductible.