A collision deductible waiver is a collision insurance add-on that waives the policyholder’s deductible if their car is damaged in an accident caused by an uninsured driver. In general, collision damage waivers only apply 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.
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.
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 that the policyholder can afford after an accident or unexpected event. The most common auto insurance deductibles are $500 and $1,000, but drivers should take several factors into account before deciding which amount 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.
Choosing between a $500 and $1,000 auto insurance deductible depends on how much you can afford right now and how much you expect to save for emergencies moving forward. A lower car insurance deductible means you’ll pay less out of pocket in the event of an accident but pay more upfront in premiums. A higher deductible means you’ll pay less upfront in premiums but more in the event of an accident.… read full answer
Drivers nationwide save an average of 8% - 10% on car insurance premiums by increasing their deductible from $500 to $1,000, according to a survey commissioned by InsuraQuotes. But where you live plays a big role in how much you could potentially save by choosing a higher deductible. Drivers in Michigan can save an average of just 4% on premiums by increasing their deductible from $500 to $1,000, while drivers in Massachusetts can save as much as 19%.
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. In doing so, remember that premium savings from a higher deductible will not always be proportional to the extra out-of-pocket costs after an accident.
As a result, you’ll need to figure out how much you would save on your premium with the $1,000 deductible and whether those savings are worth an extra $500 out of pocket if you have an accident. If not, you might be better off paying a higher premium in return for lower financial risk on the back end. That’s especially true if your vehicle is worth a relatively low amount. For example, if you have an old car that’s only worth $2,500, 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.
When choosing between auto insurance deductibles of $500 & $1,000, consider your:
Available revolving credit
It might be worth comparing your premium quote with other deductibles, too. Some companies offer lower and higher options in addition to the more popular $500 and $1,000 deductibles. You’ll commonly see $100, $250, or $2,500 deductibles available on car insurance policies.
Although higher deductibles can keep premiums low, it’s important to think about what you can afford if something happens. You won’t be happy if you can’t get your car fixed because you picked a $2,500 deductible and don’t have enough money to pay it. So, make sure to factor in how much you’ll realistically be able to pay out of pocket without much stress.
No matter what you decide, be sure to set aside enough cash to cover your deductible before you need to make a claim.
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