What Happens if You Can’t Pay Your Car Insurance Deductible?
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Written byMandy Sleight
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Mandy Sleight has over 15 years of insurance knowledge and expertise in auto, home, life, health, pet, supplemental benefits, and other insurance products. She’s a sought-after insurance expert, appearing in Bankrate.com, Moneygeek.com, U.S. News & World Report, Reviews.com, CNET, and other publications, and she's been writing for Compare.com since 2023.
Mandy uses her background and experience working for well-known insurance companies like State Farm and Nationwide Insurance to create engaging and easy-to-understand content that helps readers make smarter insurance choices that have a positive effect on their budgets and finances.
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Edited byLequita Westbrooks
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Lequita WestbrooksSenior Editor
Lequita Westbrooks is an insurance editor at Compare.com. Her writing and editing experiences span several industries, including insurance, personal finance, higher education, and more. She excels at explaining complex topics like auto insurance in simple, easy-to-understand language and is passionate about helping readers save money. Lequita graduated from the University of South Florida, where she earned her Bachelor’s degree in English.
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If you can’t pay your car insurance deductible after filing a claim, your insurance company won’t it, and you’ll be on the hook for car repairs and medical costs — even if the accident wasn’t your fault. Your car insurance company could also deny the claim if you can’t pay your deductible — the amount you pay toward a claim before your coverage kicks in — in full.
That’s why it’s vital to choose a deductible you can afford to pay. A car insurance deductible applies to specific coverages, such as comprehensive coverage, collision coverage, and, in some states, uninsured motorist coverage and personal injury protection (PIP). And you can typically set different deductible amounts for each.
Here’s what you need to know about auto insurance deductibles, what coverages require a deductible, and your options if you can’t pay.
How Car Insurance Deductibles Work
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A deductible is the amount you owe if you file a car insurance claim — but only for specific coverages. For example: Let’s say your vehicle has $3,000 worth of damage, and you have a $500 collision deductible. After the insurance company approves your claim, it’ll typically pay $2,500 to the body shop, and you’ll pay the $500 deductible.
You can choose the deductible amount you want to pay. The most common car insurance deductible is $500, though $250 and $1,000 deductibles are also typical, according to the National Association of Insurance Commissioners (NAIC).
Choosing a high deductible lowers your insurance premium, but you’ll pay more out of pocket when you file a claim, according to the Insurance Information Institute (Triple-I). On the other hand, a low deductible means you pay less money toward car repairs but more for your monthly insurance premium.
Coverages That Require a Deductible
Not all coverage types require a deductible. For example, you won’t pay a deductible if you file a liability insurance or medical payments claim.
The most common coverages that have a deductible are:
Although you can choose your comprehensive and collision deductibles, states typically determine PIP and uninsured motorist property damage coverage minimums and deductibles. State-mandated deductibles generally are $500 or less.
For example, North Carolina drivers pay a $100 deductible when filing an uninsured motorist property damage claim, but Maryland drivers pay a $250 deductible. And while insurers in Maryland must offer PIP, you can opt-out in writing. If you choose to keep PIP insurance, you won’t have to pay a deductible if you file a PIP claim.
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What to Do If You Can’t Pay Your Deductible
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Some common reasons you might not be able to pay your deductible include low income, job loss, and other financial strains that can leave you with a tight budget. Whatever the reason, here are some options if you can’t pay our deductible.
Wait to file a claim
If your vehicle damage is minor and your car is still drivable, you could wait to file a claim until you can pay the entire deductible. That said, it’s important to check your policy terms and state laws to see how long you have to file a claim if you plan to go this route.
Discuss a payment plan
The repair shop may work with you to pay your deductible over time if you can’t afford to pay the full deductible at once. But make sure you get it in writing and determine whether they’ll hold your car until you pay it in full.
Go to a different auto repair shop
It’s a good idea to compare repair costs from several shops to find the best deal. They might also have different rules for paying your deductible. If you can’t pay it in full, it may be worth using a repair shop that will work with you.
Tap into your emergency fund or savings
Though it’s not always in your best interest to dip into your emergency fund or savings account, you may consider using it to pay your deductible if your car needs necessary repairs to make it drivable.
Borrow money
It might not be the best option, but if you’re in this situation and can’t pay your deductible, it may be worth taking out a personal loan or using a credit card. This option allows you to cover your deductible and repay the amount in monthly installments — but you’ll have to pay additional interest to finance the deductible amount.
Situations When a Deductible Doesn’t Apply
You don’t always have to pay a deductible. Here are a few situations where a deductible doesn’t apply in a car accident claim:
Another driver is at fault. If someone else is at fault, their insurance company will cover your medical bills, lost wages, and car repair costs.
You have a disappearing deductible. Some insurers offer features like a disappearing or vanishing deductible, which lowers your deductible each time your policy renews or annually when you don’t file a claim. You might also have an option to add a collision deductible waiver, which eliminates your deductible for certain claims.
You have minor glass damage. If you get a repairable rock chip, some companies and states offer no-deductible glass coverage that will cover the repair.
4 Tips for Choosing a Car Insurance Deductible
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If you’re still not sure what car insurance deductible is right for you, here are some tips to help you choose:
Consider your financial situation. If you have money in savings and can afford a higher deductible, you can pocket even more with a lower monthly premium. If not, choose a lower deductible, but know you’ll pay a higher premium.
Determine your risk tolerance. Even safe drivers can end up in an accident. If you’re OK with taking the risk, a higher car insurance deductible may be worth it. But if you’re risk-averse, it might make more sense to keep your deductible low.
Figure out your car’s value. Your insurer will only pay up to your car’s actual cash value (ACV) to fix it, minus your deductible. If it isn ’t worth much, choosing a higher deductible means you’ll get less from the car insurance company after an accident.
Compare deductible amounts.Comparing quotes from several companies is the easiest way to get the best deal on a car insurance policy. You can also compare deductible amounts to see which fits your needs, risk level, and budget.
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Car Insurance Deductible FAQs
Choosing the right deductible ensures you can afford to pay it in full if you need to file a claim. Consider the answers to the most common questions about car insurance deductibles to help you decide which amount is right for you.
Can you make payments on your car insurance deductible?
It depends. You can make payments on your deductible if the repair shop allows you to. But keep in mind that your insurance company might deny your claim if you can’t afford to pay the deductible in full. If that happens, you’re responsible for covering the cost of the damage, medical expenses, and other out-of-pocket expenses.
Do you have to pay your deductible if you’re not at fault?
It depends. You might have to if your state requires you to pay a deductible for uninsured motorist coverage, or if you have a collision deductible. For instance, Virginia mandates a $200 deductible for hit-and-run claims. And in most cases, South Carolina drivers will pay a $200 deductible.
How do you get a car insurance deductible waived?
Some insurance companies offer a collision deductible waiver for certain situations, such as when you’re at fault, are a victim of a hit-and-run, or an uninsured driver hits your vehicle. It’s a good idea to check with your insurer to see what options you have.
Is it better to have a $500 deductible or $1000?
It depends. A $1,000 deductible would lower your monthly insurance premium but cause you to pay more out of pocket if you file a car insurance claim. If you choose the $500 deductible, you’ll pay $500 less if you file a claim, but you’ll pay more on your monthly premium. It’s up to you which is better.
What if your car repair costs less than your deductible?
Your insurer will only pay for repair costs that exceed your deductible. So, if the cost of repairs is less than your deductible, it’s not worth putting in a claim because your insurer will deny it. In situations like these, you'll need to pay for all repairs out of pocket. It may be a good idea to get an estimate to determine if it’s worth filing a claim.
Sources:
National Association of Insurance Commissioners, “Does your vehicle have the right protection? Best practices for buying auto insurance,” accessed September 19, 2024.
Insurance Information Institute, “Understanding your insurance deductibles,” accessed September 19, 2024.
North Carolina Department of Insurance, “A Consumer’s Guide to Automobile Insurance,” accessed September 19, 2024.
North Carolina Legislature, “§ 20-279.21, "Motor vehicle liability policy" defined.,” accessed September 19, 2024.
Maryland Motor Vehicle Administration, “Insurance Requirements for Maryland,” accessed September 19, 2024.
Maryland Insurance Administration, “What You Need to Know About Uninsured Motorist Claims,” accessed September 19, 2024.
NOLO, “Car Insurance Deadlines: How Long After an Accident Can You File a Claim?,” accessed September 19, 2024.
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Mandy SleightInsurance Writer
Mandy Sleight has over 15 years of insurance knowledge and expertise in auto, home, life, health, pet, supplemental benefits, and other insurance products. She’s a sought-after insurance expert, appearing in Bankrate.com, Moneygeek.com, U.S. News & World Report, Reviews.com, CNET, and other publications, and she's been writing for Compare.com since 2023.
Mandy uses her background and experience working for well-known insurance companies like State Farm and Nationwide Insurance to create engaging and easy-to-understand content that helps readers make smarter insurance choices that have a positive effect on their budgets and finances.
Lequita WestbrooksSenior Editor
Lequita Westbrooks is an insurance editor at Compare.com. Her writing and editing experiences span several industries, including insurance, personal finance, higher education, and more. She excels at explaining complex topics like auto insurance in simple, easy-to-understand language and is passionate about helping readers save money. Lequita graduated from the University of South Florida, where she earned her Bachelor’s degree in English.