Insurance Claims & Deductibles Explained

We get it. The idea of an insurance claim can be scary. We all have it but most of us don’t really understand how the claims process works. Let alone, what the different types of coverages mean. We will focus on automotive claims as that is our expertise. Also, although we accept all major insurance, we don’t work directly on behalf of any insurance companies so please consult your agent and/or adjuster if you have any specific questions not answered here.

What are the different types of automotive insurance policies?

There are three main types of insurance policies that help to cover your vehicle; Collision, Comprehensive, and Uninsured Motorist. These are different policies all protect and insure the same vehicle. These different policies exist in order to differentiate who is actually “at fault” during a claim process.

What do the different types of automotive insurance mean?

Collision – Accidents happen, plain and simple. Anytime your vehicle is damaged from an action that you caused, a collision claim will need to be filed if you are wanting to continue through your insurance. When filing a claim through your collision policy (collision claim), you are proceeding to have your vehicle repaired through the understanding that YOU are at fault for the damage. This would include hitting another vehicle, running into a pole at the gas station, swiping the side of the garage door; basically any damage caused by you physically hitting another object through your actions. These types of claims may result in an increase in the premiums that you pay for your insurance policy, unless you have an insurance company that participates in an accident forgiveness program. The deductible for this type of policy may be set higher because they have a higher impact on your monthly insurance premium price.

Comprehensive –  Many times when your vehicle is damaged it’s not your fault or out of your control. These times are typically where your comprehensive policy will come into play. Some common examples of losses that would be covered under this type of claim are any weather related claim (hail damage, storm damage, fire damage), an event where an animal runs/flies into your vehicle, vandalism or stolen vehicle damage, golf ball damage, and many other not “at-fault” scenarios. Even shopping cart damage can be filed under this policy. Filing a claim under an comprehensive claim may not increase your premium, as it is typically caused by something that you can’t control. Consult your insurance agent for specific policy questions.

Uninsured/Underinsured Motorist –  This policy is here to protect you from negligence from other drivers that either do not have insurance, are underinsured, or for damages caused from “hit and runs” where the other party flees the scene of the accident. This would also include damages from parking lots where someone may sideswipe your vehicle and can even include damage as small as door dings. In the event that another party is held responsible for the claim but does not have sufficient coverage, you may need to file an uninsured/underinsured claim.

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So what exactly is a deductible?

Deductibles are the term used to describe the “out of pocket” expense to the policyholder. Deductibles exist to cap a policyholder’s overall spend during a claim. A deductible enables you to have your vehicle repaired without having to pay the complete auto body shop bill. 

When a claim is filed, the claimant (the client filing the claim) will pay the pre-set deductible amount on that particular claim. Any repair cost over that deductible will be paid by the insurance company.

Every auto policy has a deductible that is associated with each individual claim. Deductibles can generally range anywhere between $100 – $2500. Although some policies have a $0 deductible.

What are the most common auto insurance deductible amounts?

The most common deductibles are $250, $500, and $1000. You can also select to have different deductible amounts for each individual policy. If you are unsure of your deductible amounts, please contact your insurance agent. 

Why are some deductibles higher and some lower?

Deductible amounts are set prior to the claim by the policyholder and their agent/broker. Generally speaking, the deductible is directly related to your premium (monthly payment) amount. The higher the deductible, the lower your premium. The lower your deductible, generally the higher the premium. 

Your insurance agent or broker might be a better fit to answer this question specifically. 

Can I change my insurance policy’s deductible?

Again, this may be a better question for your agent or broker. Generally speaking, you can adjust your policy coverage and deductible prior to any accident. Once the incident occurs you are not able to adjust your policy until the claim is finalized. 

Do I have to pay the same deductible all types of insurance claims?

Every policy is different but it is extremely common to see a client have different deductibles written into their policy based on the type of claim. It is especially common to see lower deductibles on comprehensive claims. This is because the deductible amount has a significant impact on premium price for collision claims, but not nearly as much affect on a comprehensive policy.

If more than one car is involved, who needs to file a claim?

If a police or accident report is filed, then the at fault driver listed on the report is responsible for the claim. It is your responsibility to reach out to the other drivers insurance company to start the claim. All of the insurance information for the “at-fault” party will be listed on the police report. In the event that the other driver does not have sufficient coverage for the claim, you may need to file a uninsured/underinsured claim with your own insurance. Consult with your insurance agent/broker for a more detailed explanation.

How is fault assigned (explain liability)?

In the event of an accident/police report the officer will typically assign fault based on who is deemed responsible. Sometimes, however, insurance companies may accept partial liability if they don’t think that their driver is responsible for 100% of the damages. In the event of “split-liability” you may need to file a separate claim with your own insurance.

Who pays the deductible?

The deductible is paid by the party filing the insurance claim. The deductible will typically be paid directly to the repair facility upon completion of the repairs.

In the event that an initial “field” estimate is preformed by the insurance adjuster, the estimated payout typically takes the deductible out. In other words, read your paperwork and make sure that you have a full understanding of the actual claim amounts.

Will my insurance company pay me directly for the repairs?

Not completely. Typically the insurance company will write the initial estimate amount (minus the deductible) to you after the field estimate is written. Normally, if there is a lien-holder on the title, the payment is a 2 party check made to you and the lien-holder. This assures that the vehicle is repaired. If there is no lien-holder, the initial payout may be made directly to you as the claimant. Just know that typically this is a general estimate and is not very thorough or complete. The field estimate tends to be significantly less than the final repair invoice. In the event that an insurance adjuster writes an initial check to you directly, please remember that you are responsible for paying those funds to the repair facility upon completion of repairs.

Can a deductible be waved?

No. In many states, it is actually not legal to wave a deductible. The deductible is part of a contract between the policyholder and the insurance company. There are certainly some companies that may advertise or offer to “wave” or pay your deductible. However, this is typically done by overcharging the insurance company or by cutting corners on the repair. We highly recommend staying away from any shop or company that participates in this practice as you may be putting yourself at risk of insurance fraud.

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