What if you can't pay your deductible? – CarInsurance.org (2024)

What happens if you can’t pay your car insurance deductible?

While we would all love to have no deductible and cheaper insurance premiums, that’s just not the reality of insurance coverage.

Each year, more Americans are choosing higher deductible amounts for their insurance coverage. They want to lower their annual insurance premiums, and it seems like an easy solution. When you have the cash in a savings account or room on a credit card, you might be able to stomach such an amount if it means getting your car back on the road. But what happens if you can’t pay your car insurance deductible?

For a variety of reasons, a higher deductible means lower auto insurance rates and cheaper monthly premiums. With most insurers offering deductible amounts of $1,000, $2,500, and even higher amounts, more and more consumers are choosing to risk paying a hefty sum out of pocket in the event of a claim.

If you cannot pay the full deductible up front after an accident, some repair shops may work with you on a payment plan. If you cannot pay the whole deductible, some shops may not start the repairs right away. Depending on your policy, your insurance company could also refuse to pay until you have paid your portion.

Read more: When to Use Your Deductible

What are some options to make ends meet if you can’t afford your car insurance deductible?

If you decide to raise your deductible to save money on your annual premium, it’s best to put the money you save aside just in case. If you haven’t done so, you may need to figure out how to pay your deductible up front after an accident. Following are a handful of strategies to help you make ends meet and get your car back on the road after a serious accident.

• Don’t Fix Everything: This is the simplest and most effective solution to getting your car back on the road without paying your deductible. Your insurance company is required to issue payment for the full amount of the repair, but your insurance provider doesn’t choose where you get them done. You still get to choose how that money is spent, and what does and does not get fixed. Your repair shop can advise you on what are essential repairs and what can be skipped. In most collision repair jobs, there is a combination of necessary functional or mechanical repairs, and optional cosmetic repairs. Ask the shop what can be ignored, what’s necessary, and what can be repaired to a “functional but not beautiful” standard. This might mean driving around with a mismatched fender or bumper, but it’s better than no repair at all. In some cases, insurance companies will issue credits towards your deductible if you choose to keep things like a bumper with minor associated scratches or dents.
• Maximize the Claim Payment: Work with your chosen body shop to have them do some basic disassembly to find and document all accident-related damage. Then make sure your insurance adjuster inspects it after the body shop does so. This will cause your insurer to issue additional payment for everything that is found. Often this can significantly increase the amount of the repair estimate, and the insurer’s payment. You’re still free to choose what the shop does and does not fix, though you may have to pay the shop a small fee for their “diagnosis” time if they’re not fixing everything.
• Go Without A Rental: Some insurers will offer “cash out” options for rental coverage, instead of paying directly for a rental car. If you have rental coverage and you can go without your car for a few days or weeks, ask your insurer to reimburse you for your rental. Your insurance rate could also be a little lower without rental coverage. But you can try to negotiate after an accident.
• Use Aftermarket or Refurbished Parts: Ask your repair shop about aftermarket, used, and refurbished parts. This is a minor cost-saving measure in the scheme of things, but a hundred or two hundred dollars here and there can make a difference. Keep in mind, this does not change your collision deductible or insurance premium.

Should you shop around for repairs?

If your car is still safe and legal to drive after the accident, take your time planning which shop to take your car to. Get multiple estimates from different shops, and ask each one what they can do to keep your repairs within a budget. Your claims adjuster will inspect your car to give an estimate of damages. Depending on your auto insurance policy, you may have flexibility to find the right repair shop.

If your car is NOT safe to drive or isn’t legal to be on the road due to damage and is being towed from the scene, demand the tow truck to bring your car to your residence instead of a repair shop.

If you don’t tell them what to do, most tow truck drivers will bring the vehicle to a shop of their choice, because they get a kickback or extra business from the shop.

Most insurance companies will pay the extra $100 or $200 for an additional tow from your residence to your chosen shop at a later date. Even if they refuse, an extra $100 or $200 for the additional towing might mean getting friendly service from a shop you can trust (and saving hundreds or thousands of dollars in repair costs), or difficult service from a shop that leaves you with few options and keeps your car until you pay every penny.

When the car is parked at your residence, take numerous photos of the damage and email them to various shops to get quotes. They will likely need your car’s Vehicle Identification Number, which can be found on any official vehicle registration document and on the vehicle itself. If you already have a preferred shop for collision coverages, you can also have your car towed there. Keep in mind, some insurance companies offer more if you go to one of their preferred mechanics.

Should you use a payment plan?

Some shops will offer payment plans for customers. If you present yourself as reliable, professional, and straight-forward, most shops will be willing to work with you to get your car repaired now.

While it may hurt your credit score, opening up a new credit card may be one of your only options if all else fails. You might also be able to get a limit increase on a current credit card if you call and speak with your creditor. This should be a last-resort option after all other options are exhausted, but for some the ability to drive to work is a necessity to make ends meet.

“Title loans” are an option and most likely a last resort for this circ*mstance. Be careful, as most title loan services will charge outrageous insurance premiums and some can be “loan sharks.” So be sure to read any contract you may have before signing up for a title loan, and use this only as an absolute last resort if all else fails. Most financial professionals would recommend avoiding this route altogether.

Understanding Caliber Collision Payment Plans and Deductible Options

For those needing vehicle repairs, caliber collision payment plan options can significantly ease the financial burden. Many customers often ask, does Caliber Collision do payment plans? Yes, caliber collision offers various caliber collision payment options tailored to meet customer needs, including flexible financing and installment plans. This can be particularly helpful when it comes to paying insurance deductible amounts. Some shops may even provide deductible assistance programs to help cover these costs. Additionally, understanding the deductible vs out of pocket car insurance expenses is crucial. While the deductible is the amount you pay before your insurance covers the rest, out-of-pocket expenses might include any costs not covered by your policy, such as certain repairs or rental car fees.

Navigating Deductibles and Payment Plans

When it comes to deductible in car insurance, there are several strategies to manage these costs. One option is a deductible buydown example, where you pay a higher premium for a lower deductible. This can be beneficial if you want to reduce your upfront costs during a claim. Some repair shops offer a deductible payment plan, allowing you to spread out the payments over time. This payment plan for your deductible can make large, unexpected expenses more manageable. For homeowners, understanding terms like all other perils deductible and all other perils in home insurance is essential. The all peril deductible and all perils deductible meaning refer to the fixed amount you pay out-of-pocket for any covered loss under your insurance policy, simplifying the claims process by applying a single deductible to all incidents.

Understanding Payment Plans and Deductible Options for Car Repairs

For those in need of vehicle repairs, Crash Champions payment plan options can provide financial relief by allowing customers to spread out the cost of repairs. Many customers look for reliable reviews, such as Caliber Collision payment options reviews, to ensure they choose a trustworthy provider. Additionally, a car insurance deductible payment plan can be helpful, enabling policyholders to manage their expenses over time. Some auto body shops offer to waive deductible fees, though this practice varies by location and shop policies. If you can’t pay deductible costs upfront, discussing financing options with your repair shop or insurance company is crucial. Understanding car deductible meaning is essential; it is the amount you pay out-of-pocket before your insurance covers the remaining repair costs.

Insurance Options and What to do if you Can’t Afford Your Deductible

For those with comprehensive coverage, it’s important to understand how comprehensive insurance works, covering damages from non-collision incidents like theft or natural disasters. Crash Champions payment options and other flexible payment plans can make handling unexpected repair costs easier. If you find yourself in an accident but no insurance, seeking an accident car repair near me becomes crucial, although it may result in higher out-of-pocket costs. An accident deductible is the amount paid before insurance covers the rest of the repair costs. Insurance options like accident forgiveness through Allstate and accident forgiveness through Progressive can protect your premium from increasing after an accident. Knowing the annual deductible meaning helps in budgeting for potential expenses. If you can’t afford your deductible, consider discussing a car insurance deductible payment plan with your insurer or seeking assistance programs to manage these costs effectively.

What kind of plan should you make for a higher deductible?

Plan ahead if you want to raise your deductible to save money. The idea for insurance companies is you pay for more small claims within that deductible, and they pay that much less on larger claims. So examine your budget ahead of time and ask yourself, “Can I really afford to pay my deductible out of pocket right now?”

If the answer is clearly no, you should lower your auto insurance deductible in exchange for slightly higher monthly coverage rates on your actual insurance policy.

If you know you’re not going to be able to meet your deductibles on your auto insurance policies, don’t contract to have repairs done that include the deductible in addition to payouts from your insurer. You may find yourself without transportation after the repairs are done.

Most states allow shops to retain possession of a car using a mechanic’s lien on the unpaid bill. The shop can legally keep your car until they’re paid. This could put you in a pinch even if you have rental coverage if you can’t get your car back.

If you feel you may be paying too much, you can compare rates here with our free tool. Enter your ZIP code below to get started. Then answer a few questions and get quotes on options near you.