Insurance Deductibles: Breaking Down the Costs of Repair

If you've been involved in a car accident, or have incurred damage to your property, there is a likelihood that you might need to use either your insurance policy, or the policy of someone who caused damage to your property, to pay for the repairs. The insurance company however will not cover the entire cost of the repair, only a portion of it. So who pays the rest? You may have to. Your portion of the cost is known as your deductible, and we will be discussing different types of deductibles today, as well as when and if they apply to you.

​If your car repairs are going to be paid for by an insurance company, there are two types of claims your particular claim can be categorized as. The first is a collision claim, and as the name suggest, means a car was wrecked, particularly due to human error. Scenarios that would qualify as a collision claims include: you wrecking your car by driving into a stationary object; you wrecking your car by hitting someone else's car; lastly, your car being wrecked by someone else hitting your car. 

The second type of claim is a comprehensive claim. These claims include damages to your car caused by events other than collisions. Acts of nature such as fire, hail, flooding, or wind, which cause damage to your car, are considered comprehensive claims. Vandalism of your car, or theft, are also considered comprehensive claims. Essentially, if the car was damaged in a way not caused by an outright collision is considered comprehensive. A common type of comprehensive claim that we see is wind causing a tree to fall onto a car.

A deductible can be thought of as a copay, same as when you visit your doctor. You pay the doctor a relatively small fee upon your visit, and the doctor then bills the remaining charges directly to the insurance company. Please note: Insurance deductibles for auto body repairs are collected by the auto body repair shop at the end of the repair, not up front. 

An insurance deductible is paid for by the insured, when fixing their own vehicle. A common misconception is that you must pay your deductible, if, say for example, you hit someone else's car and they are claiming the repairs through your insurance policy. Remember, you only pay the deductible when fixing your own car. If someone else is making a claim against your policy, you do not pay your deductible to fix their car, only your car.

Depending on your insurance policy, your deductible amount may be different depending on the type of claim. When purchasing your policy, you may have elected to have different deductible amounts for collision and comprehensive. Please check your policy for the exact numbers.

Finally, a very common question we are asked is, do I need to pay my deductible is someone else hit my car? The answer is, that it's complicated. This can go two ways: 1) you file an insurance claim for the damages through your insurance company, or 2) you file an insurance claim directly through the insurance company of the person who hit you.

If you filed the claim through your insurance company, you will have to pay your deductible, even if the accident was not your fault. However, and this is a big however, once the insurance companies settle on who was at fault, and the insurance company of the person who hit you accepts liability for the damages, they will pay your deductible for you. Your insurance company will collect your deductible from the other person's insurance company. This might happen while the vehicle is still being repaired, which means your deductible will be waived, and you will have nothing to owe upon picking up your car. If the collection process, known as subrogation, takes longer than the repair, then you will have to pay your deductible, but the insurance company will reimburse you later on once the subrogation process is complete.

If you filed a claim directly through the other party's insurance policy for an accident that was not your fault, and that person's insurance company accepts fault and liability, then you will not have any deductible to pay.

We hope this piece on deductibles helps, as it is a common point of confusion. Remember, if you have any other questions that we have not discussed, you can reach out to us 24/7/365. We are here to help you.

Thanks for reading. Cheers!