What is a collision insurance deductible?

Yes, you pay your deductible to the body shop when you file a car insurance claim. After the body shop sends your car insurance company a repair estimate, your insurer will pay the shop the full amount minus your deductible, which you must pay to the body shop directly. In some cases, your insurer might send you the money instead, but they will still subtract the deductible from the final amount.... read full answer

If you can’t afford to pay the deductible to the body shop, you have a handful of options. You can set up a payment plan with the mechanic, take out a loan, use a credit card, or save up until you can afford the deductible. In some cases, the body shop may agree to waive your deductible, but that is rarely an option.

In order to make sure you can pay the body shop for repairs to your car, you need to pick a deductible amount that you can afford in an unexpected situation. To learn more, check out WalletHub’s guide to car insurance deductibles.

A $1,000 deductible is better than a $500 deductible if you can afford the increased out-of-pocket cost in the event of an accident, because a higher deductible means you’ll pay lower premiums. Choosing an insurance deductible depends on the size of your emergency fund and how much you can afford for monthly premiums.... read full answer

How to Choose Between a $500 and a $1,000 Deductible

1. Figure out how much you would save on your premium with a $1,000 deductible.

The goal is to determine if those savings are worth paying an extra $500 out of pocket after an accident. Car insurance companies typically use a $500 deductible to give quotes, which means you’ll need to make a point of checking how things change with a $1,000 deductible.

Remember that the premium savings will not always be proportional to the extra out-of-pocket costs after an accident. For example, Progressive reports that doubling your deductible from $500 to $1,000 may result in only a 28% decrease in premiums on average.

2. Consider how much you could afford to pay if an accident happened today.

Accidents can happen at any moment, so if you don’t have a lot of savings or expendable income, a lower deductible is usually a safer choice to avoid financial stress after an accident.

3. Determine your car’s actual cash value.

If you have an old car that’s only worth $2,500, for example, you probably don’t want to carry a $1,000 deductible. It’s too close to the total value of your vehicle, which means the replacement cost wouldn’t put much more stress on your finances than the deductible itself.

4. Make a decision based on your financial situation and preferences.

After evaluating your income, monthly expenses, savings, available credit and car value, it should be clear which is a better deal for you: saving monthly on premiums or saving in the event of an accident.

Although $500 and $1,000 are the most common deductibles, you may want to consider other deductible amounts, too. Some companies offer lower and higher options, such as $100, $250 or $2,500 deductibles.

No matter what you decide, be sure to set aside enough cash to cover your deductible before you need to make a claim. To learn more, check out WalletHub’s guide to car insurance deductibles.

You do not have to pay a car insurance deductible if you are not at fault in a car accident. The at-fault driver's liability insurance will usually cover your expenses after an accident, but you may want to use your own coverage, in which case you will likely have to pay a deductible.... read full answer

It can sometimes take the insurance adjuster a long time to determine fault, which can affect when you receive compensation from the at-fault driver. In that case, you can file a claim with your collision insurance, personal injury protection, or MedPay coverage in order to pay for the cost of repairs or medical bills in the short term.

You will have to pay a deductible for collision coverage and personal injury protection, but your insurance company will eventually recoup your costs through subrogation with the at-fault driver’s insurer. However, if you are partially at-fault, then your expenses may be reimbursed in proportion to your fault or not reimbursed at all, depending on your state.

If the other driver is uninsured or doesn’t have enough coverage to pay for your expenses, you can file a claim with your uninsured/underinsured motorist insurance, if you have it. Uninsured/underinsured bodily injury coverage pays for your medical expenses and does not require a deductible. If your car is damaged, your uninsured/underinsured motorist property damage coverage will pay for repairs, and in some states you will have to pay a deductible.

To learn more, check out WalletHub’s guide to car insurance deductibles.