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Deductible Knowledge and Understanding your Policy

May 01, 2013

Recently, we have had quite a few clients wanting to pay for repairs, caused by them, to other people vehicles. Their concerns were always about deductibles, meeting a deductible or the repair costing less than a deductible – very rare. We take the time to explain their options and how a deductible works. Generally speaking the following explanation fits a majority of policies, but you need to read yours carefully. Not all policies are the same and the following is a general discussion.

A deductible is a clause in an insurance policy that relieves the insurer of responsibility for an initial specified loss of the kind insured against; also : the amount of the loss specified in such a clause. Makes sense right? In plain English: they write a check for the repairs and you have agreed to that check being less than the total amount due by a specific agreed figure usually $500. Deductibles generally range from $0 to $1000 and any amount in between. The most common is $500. But today we are seeing many $1000 deductibles and a lot of $250 deductibles. Your insurance company has agreed to pay for your repairs up to the limits of your policy less any deductible. This generally applies to your OWN vehicle. The biggest misconception we see on a daily basis is that you are responsible for a deductible on someone else’s vehicle – You are NOT. The deductible only applies to your own vehicle. This is a general rule for consumer policies, commercial polices can be different.  If you read your consumer policy as it relates to losses to your own vehicle when it comes to a deductible, it appears next to the words “comprehensive” or “collision.”  When you file a claim on your own car it is a comprehensive or collision claim and they will pay for repairs, less the deductible  When you hit someone else it is a “liability” claim. You are liable for the damages and your insurance company will assume the cost for you. If you look at your policy, a deductible is usually not present next to the coverage amounts for liability.

It can be very confusing if you do not read insurance policies for a living or deal with them on a daily basis. We all hope that you never have to use it, but when you have an accident, the insurance is there when it is needed. Most people pay $100 a month on average to insure a modern car. You do get what you are paying for. The cheaper the insurance, the cheaper the coverage. Generally speaking the cheaper the insurance, the higher the deductible too. So when you do need that policy to fix your car, you may need to pay up to $1000 out of pocket for your repairs. The only way to save any money is to do a less than quality repair. A professional, quality facility following proper repair procedures and using the right parts, usually has no wiggle room on the repair cost and the deductible. Review your policy and coverage.  Ask your agent for assistance. Check the monthly cost for insurance with a lower deductible, you may be cheaper than you think? Feel free to contact us for further explanation or assistance on your next repair. Contact us today.

-Rob Mays aka Carnutdallas

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