If a Car Accident Is My Fault, Do I Pay the Excess?

When you are involved in a car accident and believe you are responsible, understanding your obligations and how your car insurance policy responds is important. This includes knowing what costs you might incur and how your coverage addresses damages.

Understanding Your Car Insurance Policy

A deductible is the amount you agree to pay out-of-pocket before your insurance coverage begins to pay for damages. This pre-agreed amount is selected when you purchase your policy and typically ranges from a few hundred dollars to over a thousand, with common amounts often being $500. Choosing a higher deductible typically results in lower monthly or annual premiums, while a lower deductible leads to higher premiums but less out-of-pocket expense at the time of a claim.

Two primary types of coverage are relevant after a collision: collision coverage and liability coverage. Collision insurance pays for repairs or replacement of your own vehicle if it is damaged in an accident, regardless of who is at fault. If you have a car loan or lease, collision coverage is often a mandatory requirement. For fully owned vehicles, this coverage is optional.

Liability coverage protects you financially if you are responsible for causing injuries or damage to another person’s property. Most states require drivers to carry at least a minimum amount of liability insurance. This coverage has two main components: bodily injury liability, which covers medical bills and lost income for injured parties, and property damage liability, which pays for repairs to another person’s vehicle or property. Liability coverage does not have a deductible for damages to the other party; it covers their costs up to your policy limits.

When a Deductible Applies in a Fault Accident

When you are at fault in a car accident, your deductible primarily concerns repairs to your own vehicle. If you use your collision coverage, you will pay the deductible. For example, if your vehicle sustains $3,000 in damages and you have a $500 collision deductible, you would be responsible for paying that $500, and your insurer would cover the remaining $2,500. This deductible applies each time you file a claim under your collision coverage.

If the cost of repairs to your vehicle is less than your deductible amount, your insurer will not pay anything, and you will be responsible for the full repair cost yourself. For instance, if your deductible is $1,000 and the damage to your car is only $700, you would pay the entire $700.

In contrast, your liability coverage, which pays for the damages and injuries you cause to others, does not involve a deductible for the at-fault driver. Your liability policy covers the costs for the other party’s vehicle repairs and medical expenses up to your chosen policy limits. Therefore, if you are at fault, you would pay your collision deductible for your own car’s damage, but you would not pay a separate deductible for the property damage or bodily injury claims made by the other driver.

Reporting the Accident and Navigating the Claim

After an at-fault accident, promptly report the incident to your insurance company. Most insurers recommend contacting them within 24 hours of the collision. You can initiate a claim by contacting your insurance agent, calling the company’s claims department, or through their website or mobile application. Providing accurate information, including photos of the damage and any police reports, will assist your insurer in processing the claim efficiently.

Once the claim is opened, a claims representative or adjuster will be assigned to your case. They will inspect your vehicle to assess the damage. During this assessment, the total cost of repairs for your vehicle will be estimated. Your deductible amount will then be factored into this total.

The method of paying your deductible can vary. You might pay the deductible directly to the repair shop when you pick up your vehicle after the repairs are completed. Alternatively, if your car is declared a total loss, or if the insurer directly reimburses you for repairs you’ve already paid for, your deductible may be subtracted from the total payout amount. It is important to confirm the payment procedure with your insurance company or the repair facility.

Other Financial Considerations After an At-Fault Accident

Beyond the deductible, an at-fault car accident can lead to other financial implications. A common consequence is an increase in your insurance premiums upon policy renewal. An at-fault accident often signals a higher risk, potentially leading to a premium hike that can range from a minor percentage to over 50%. This increase typically remains on your record for three to five years, though the exact duration and amount depend on the accident’s severity, your driving history, and your insurer’s policies.

Another financial consideration arises if the damages you cause exceed your policy’s liability limits. Your liability coverage pays for the other party’s damages and injuries, but only up to the maximum amount specified in your policy. If total expenses, such as medical bills or repairs to a high-value vehicle, surpass these limits, you could be personally responsible for paying the remaining balance. This underscores the importance of selecting adequate liability coverage limits when purchasing insurance.

Additional costs can include rental car expenses if your policy does not include rental reimbursement coverage, or if the coverage limits are exhausted during a lengthy repair period. Some policies offer this benefit, often with daily and total claim limits.

For minor damages, you might consider paying for repairs yourself without filing a claim. This can prevent a claim from appearing on your record and potentially avoid a premium increase, especially if the repair cost is less than or slightly more than your deductible. However, weigh this option carefully, as some policies require all accidents to be reported, and failing to do so could lead to issues with future claims or policy cancellation.