A collision deductible waiver helps drivers save money on their deductible after an accident with an uninsured driver. Collision damage waivers typically apply only to accidents where an identified driver without insurance is completely at fault. A notable exception is California, where collision deductible waivers can be used in hit-and-run accidents.
When a Collision Deductible Waiver Is a Good Idea
Collision deductible waivers are similar to uninsured motorist property damage (UMPD) insurance, so a waiver is usually redundant if you are already required by your state to have UMPD. In states where UMPD is optional or unavailable, collision deductible waivers can be a great alternative for the same type of coverage. However, keep in mind that you cannot purchase a collision deductible waiver without collision insurance.
Collision Deductible Waiver Cost
The cost of a collision deductible waiver is usually less than $50 for your entire policy term. Although collision deductible waivers can only be used in a limited number of situations, their low cost means they are a good investment if you want to avoid any out-of-pocket expenses in the event that you’re hit by an uninsured motorist.
Finally, it should be noted that collision deductible waivers are different from collision damage waivers, which are sold by rental car companies to cover damage to their vehicles.
A good deductible for auto insurance is an amount you can afford after an accident or unexpected event, although most drivers pick an average deductible of $500. Other common auto insurance deductibles are $250 and $1,000, but drivers should take several factors into account before deciding which one is right for them. These include what premium they can afford and how likely they are to file a claim. … read full answer
Since policies with a lower deductible cost more, it can be tempting to choose a high deductible. But your deductible shouldn’t be more than you can comfortably afford to pay out of pocket if your car is damaged. If your deductible is too high, you could be putting yourself in a difficult financial position down the road.
You can choose different deductibles for separate types of coverage, so you should consider how likely you are to file each type of claim. For example, if you live an in an area that is prone to natural disasters, consider getting a comprehensive insurance policy with a low deductible. Similarly, if you’ve never had an accident and you live in a low-traffic area, consider choosing a high-deductible for your collision insurance policy.
Every driver’s financial situation is different, so there is no such thing as a one-size-fits-all deductible. To learn more, check out WalletHub’s guide to car insurance deductibles.
You can avoid paying your car insurance deductible for vehicle repairs if the mechanic agrees to waive it, which is possible but highly unlikely. In some cases, your insurer may also waive your comprehensive deductible for glass repair specifically. Otherwise, if you are filing a car insurance claim with a type of coverage that has a deductible, you have to pay it.… read full answer
Types of Car Insurance That Don’t Require a Deductible
Not every insurance claim requires you to pay a deductible. For example, many insurers waivecomprehensive deductibles for glass repair, and some states allow drivers to choose a separate $0 glass deductible.
In addition, if you are in an accident and another driver is at-fault, your costs will be covered by their liability insurance, which doesn’t require you to pay anything out of pocket. If you choose to use your collision coverage or personal injury protection insurance to cover immediate costs, you will have to pay your deductible. However, your insurance company will eventually recoup your costs from the at-fault driver’s insurer.
On the other hand, you may have to pay a deductible if you are hit by an uninsured motorist and have to use your uninsured motorist property damage insurance, though it usually depends on your state.
What To Do If You Can’t Afford Your Car Insurance Deductible
If you want to file a claim but cannot pay your deductible, you have a few options. You can set up a payment plan with the mechanic, put the charge on a credit card, take out a loan, or save up until you can afford the deductible. Depending on your state and insurance company, you could have anywhere from 30 days to a few years to file a car insurance claim after an accident.
Because it’s almost impossible to avoid paying your car insurance deductible in situations where it actually applies, it’s important that you pick a deductible amount you can afford. 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 don’t want to carry a deductible of $1,000. 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.
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