When Do You Pay a Car Insurance Deductible?

A car insurance deductible is the amount a policyholder pays out-of-pocket towards a covered loss before their insurance company begins to pay. It applies to each claim filed.

Common Coverage Types and Their Deductibles

Collision coverage helps pay for damage to your vehicle from a collision with another vehicle or object, regardless of fault. This coverage almost always includes a deductible, which you pay before the insurer covers costs.

Comprehensive coverage addresses damage to your vehicle from non-collision events, such as theft, vandalism, fire, natural disasters, or impacts with animals. Comprehensive policies typically feature a deductible, similar to collision coverage. In contrast, coverages like liability insurance, uninsured/underinsured motorist bodily injury, and medical payments or personal injury protection (PIP) generally do not have deductibles.

When a Deductible is Required

A deductible is required when you file a claim under a policy coverage that includes one, such as collision or comprehensive. For collision claims, you typically pay your deductible when you are at fault for an accident and your vehicle sustains damage. This also applies to single-vehicle accidents, like hitting a tree or overturning, or when fault is shared or cannot be definitively assigned.

For comprehensive claims, a deductible is required for damage from events beyond your control. This includes incidents like vehicle theft, damage from natural disasters such as hail, floods, or wind, and damage from vandalism or falling objects. Striking an animal on the road also falls under comprehensive coverage and requires a deductible payment. However, a deductible might not apply if you are clearly not at fault for an accident and the other driver’s insurance pays for your damages, a process known as subrogation. Additionally, some policies or state laws may waive deductibles for specific types of claims, such as full glass repair or replacement.

The Deductible Payment Process

The payment of your car insurance deductible typically occurs when your vehicle’s repairs are completed, rather than upfront to the insurance company. If your vehicle is repaired, you usually pay the deductible directly to the repair shop. The insurance company then pays the remaining balance of the repair cost to the facility.

In situations where your vehicle is deemed a total loss, the deductible is generally subtracted from the total payout the insurance company provides to you. For example, if your vehicle’s value is assessed at $10,000 and your deductible is $1,000, you would receive a $9,000 payout. If you receive a direct cash settlement for damages instead of repairs, the deductible is also usually deducted from that amount. Payments to the repair facility can typically be made using common methods like cash, check, or credit card.