When Does a Deductible “Kick In” Post-Accident?
May 16, 2024
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Your deductible, in layman’s terms, is the percentage or dollar amount of risk you agree to take on when you get insured. With car insurance, it’s typically represented in a dollar amount, ranging between $250 to higher than $1,000. Deductibles serve to represent the fact that both you and the insurance company share in the responsibility for a claim. They also serve to prevent policyholders from incurring too-high insurance premiums, as they discourage them from filing claims too frequently. Deductibles can also behave as a deterrent for filing too small of claims, such as dents and bumps, which may cost less to repair than your deductible is worth.
Beyond that, there are a few things about your deductible that you need to know: namely, when it applies. See, no one wants to get into an accident, but knowing what to do in the event of an accident is invaluable information. You should know when to pay your deductible after an accident, if you need to pay it depending on the circumstances, what happens if you can’t pay for it, and more.
Here’s Excalibur’s breakdown.
What You Need to Know About Deductibles: Q&A
Deductibles are rather easy to understand when written out plainly, but the issue is that a lot of people are just “assumed” to know what they are. We’re here to help you out, and if you have any further questions beyond what is addressed here, don’t hesitate to give us a call!
Are you required to pay your deductible as soon as an accident happens?
Whenever you submit a claim on your insurance policy where your coverage is subject to a deductible, you are required to pay that deductible, so long as the coverage is insured, and it equals more than your deductible amount. Once the claim is approved, you are required to pay your deductible before your insurance company steps in to cover the remaining costs.
But the very specific “when” can vary from insurance company to insurance company. Some insurance companies will ask you to pay for the deductible upfront, whereas others may reduce the amount from your insurance payout. I.e., if you had made a claim for, say, $3,000, and your deductible was $500, you would then only receive a $2,500 payout. If you aren’t sure which method your insurance provider uses, be sure to give them a call to ask.
Is it mandatory to have a police report when you file an insurance claim prior to paying your deductible for an auto accident?
Not necessarily, no. You will not even be required to report the accident to the police if the damages equal less than $2,000 from both vehicles and no one was seriously injured. Some small fender-benders may only rack up damages in the hundreds, or even just a cool $1,000. You can still file an insurance claim to get your vehicle repaired, but you don’t need to report the accident to the police.
Even so, filing a report can mean you’ll have a record of the incident in writing, even if you don’t plan on making an insurance claim. Regardless of what many people believe, your insurance will not be impacted if you file a police report.
However, even if the damage hasn’t exceeded $2,000, the following conditions will require you to file a report to the police regardless:
- If someone is severely injured
- If the collision was caused by impairment or another criminal activity
- If one of the involved drivers is uninsured
- If a pedestrian was involved in the accident
- If the accident involved a government vehicle
- If private or municipal property was damaged in the accident
In the cases listed above, you must file a police report within 24 hours.
Do you have to pay your deductible if you’re not at-fault after an accident?
This applies specifically to auto insurance, and the short answer is: no. If you are not at-fault in an accident, you would only need to pay a deductible if you decided to submit a claim to your own insurance company. It is assumed that all drivers have insurance, and so if you’re not at-fault, the at-fault driver would have to use their own insurance company to cover the cost of your medical bills and repairs. There are a few circumstances where you’ll need to pay your deductible, even if you weren’t at-fault in an accident. Those are as follows:
- If fault couldn’t be determined
- If the at-fault driver is underinsured or uninsured.
You will need to file a claim in both scenarios and, unfortunately, pay your deductible.
Some drivers have an endorsement known as a disappearing deductible. Your deductible will reduce by 20% for each year you do not file a claim. It’s an excellent way to reward drivers and so, in theory, after 5 years of being claim-free, you could have a deductible of $0. But not all insurance companies offer this particular reward system.
What happens if you can’t pay a car insurance deductible?
You should always, always ensure you have enough pocket money to pay for your car’s insurance deductible. If you cannot pay for the deductible, your insurance company may deny your claim and your car will likely be withheld by the mechanic. Any repairs or medical bills may fall to you alone to pay. Always consider how much you are willing to pay when it comes to a deductible, and choose an amount that makes sense for you.
Who pays for my car insurance deductible?
It will always be you who pays your deductible, so be sure that your deductible amount is something you can reasonably pay for out-of-pocket. Once it has been paid, the responsibility now falls to your insurance company to pay the remainder of the amount.
You would need to pay a deductible if your car was broken into or vandalized, if you were fully at-fault or partially at-fault in an accident, or if you suffered from a hit-and-run accident. Hit-and-runs are particularly awful, and criminal, and if you did not pay for collision coverage, you would have to pay for a hit-and-run accident out-of-pocket.
However, if you can identify who hit you, you would have coverage under the direct compensation property damage portion of your policy, assuming the hit-and-runner had insurance.
If you have any further questions about deductibles, give Excalibur Insurance a call. We’re happy to discuss and put your mind at ease if you have any concerns.