Do I Pay My Deductible Before or After My Car Is Fixed?

Last Updated on January 6, 2020

Most car insurance policies have something called a “deductible“, which means you’ll need to pay a certain amount of money out of pocket before your insurance will kick in and cover the rest of the repairs or medical bills. This is common practice with health insurance and other types of insurance policies as well. When you file an insurance claim, you may be wondering when exactly you need to pay your deductible. Here’s what you need to know about deductibles and common practice among car insurance companies.

Do I Pay My Deductible Before or After My Car Is Fixed?

When Do You Pay Your Deductible?

You’ll never actually pay your deductible to your insurance company – this is a very common misconception. After your claim is approved, your insurance provider will send you a check for the total cost of the damages less your deductible. For example, if your deductible is $500 and the total damages of your car come to $1500, your car insurance company will send you a check for $1000. You can then use the money they sent you to repair your car, and you’ll need to pay the repair shop for the deductible amount out of pocket. You can also opt to pay for the repairs entirely out of pocket right after the accident and then have the car insurance company reimburse you. Talk to your insurance company when you file the claim to make sure you fully understand their claims process and how they prefer you to pay for your repairs.

How Does Your Deductible Affect Your Car Insurance Price?

The amount of your deductible will affect how much your car insurance premium costs each month. The higher your deductible is, the lower your monthly costs will be. This is because a high deductible means the insurance company won’t have to pay as much if you file a claim, so they consider you less of a financial risk. If you’re looking to lower your monthly car insurance payments, increasing your deductible is an easy way to do it. This is a particularly attractive option if you don’t drive on a daily basis, as your chances of getting into an accident are lower. However, you’ll want to make sure that you can still afford your deductible – many people make the mistake of raising their deductible to save money on monthly payments, and then end up not being able to afford their repairs later on. You’ll want to look for a nice middle ground where you can easily afford both your monthly payments and your deductible. You can also look for insurance companies that offer good discount options for their customers, as these can help you mitigate some of the costs of car insurance.

Are There Situations Where a Deductible Doesn’t Apply?

There are some situations where you won’t have to pay your deductible. Deductibles do not apply to liability coverage but instead are used for comprehensive coverage, collision coverage, and other types of personal coverage. If you are involved in an accident and the other party’s liability coverage pays for damages, you won’t need to worry about a deductible. Alternatively, if you’re found at fault and your insurance pays, you still won’t need to pay any costs out of pocket. Some states also allow you to get car insurance policies that don’t have a deductible. They are usually much more expensive on a monthly basis but could make things much less stressful if you’re ever in a serious accident.

If you’re unsure about how your deductible works or when you’re going to need to pay for repairs, contact your insurance company. You will never need to pay your insurance company directly for your deductible – it will just be taken out of your eventual reimbursement. It’s always helpful to have enough money to pay for your deductible saved up, just in case you do get into an accident and need to repair your car right away. If you have your deductible amount already in savings, you won’t need to rearrange your budget in order to pay for repairs.

James Shaffer
James Shaffer James Shaffer is a writer for and a well-seasoned auto insurance industry veteran. He has a deep knowledge of insurance rules and regulations and is passionate about helping drivers save money on auto insurance. He is responsible for researching and writing about anything auto insurance-related. He holds a bachelor's degree from Bentley University and his work has been quoted by NBC News, CNN, and The Washington Post.
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