Insurance

When Am I Responsible For My Car Insurance Deductible?

I didn’t understand why the automobile insurance agent was telling me the amount of my deductible.  The other driver hit me, and was clearly the cause of the accident. It didn’t seem right that I would have to pay a penny to fix my car. I remembered the handful of fender benders I had been in previously and recalled that sometimes I paid my deductible and sometimes I didn’t. Clearly I didn’t understand exactly how car insurance worked, and needed to ask some additional questions.

First, I brushed up on the different types of car insurance:

Liability

This type of insurance is required to put your car on the road. It will pay for the repairs of the other person’s vehicle as well as any medical expenses up to the value of the policy.

Collision

If your car strikes another vehicle or a stationary object collision insurance will pay to repair your vehicle and your medical bills. There is typically a deductible amount associated with collision insurance, meaning you pay the deductible and the insurance company pays the rest, up to the value of the policy.

Comprehensive

If your vehicle is damaged by circumstances out of your control, such as a weather event, comprehensive insurance will pay to repair your vehicle. As with collision insurance, there is typically a deductible the vehicle owner must pay.

I then called my insurance agent to clarify under what circumstances I would pay my deductible, and when the other person’s insurance policy would pay the complete cost of my repair.

• Which party’s insurance policy is used depends on who is assigned fault.
• I live in a “no fault” state, which really just means the police are not in the business of determining and assigning fault. The insurance companies still gather information and assign fault
• If I would be assigned fault, my claim would be processed under my collision policy and I would need to pay my deductible.
• If the other party is assigned fault, my claim would be processed under their liability policy and I would not pay a deductible
• If I would have my vehicle fixed before the insurance companies completed their investigation I would have to pay my deductible, and be reimbursed for it after fault had been assigned.

After both I and the other party involved submitted our claims and relayed our version of what happened, the other driver was assigned blame. I can now proceed with having my vehicle repaired without charge.

We rely on vehicles to take us where we need to go, so it’s likely that all of us will have to deal with a fender bender at point. Knowing how insurance works, and when you will owe your deductible is useful knowledge that can help ease the inconvenience of an accident.

Brought to you courtesy of Brock

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Brock Kernin

Brock is a software engineer by day and personal finance blogger at night. He is a fitness junkie and enjoys grilling and smoking meat. Married with two children,  Brock strives to improve his skills as a husband and father, and is always on the lookout to stretch his family’s budget as far as he can.