In auto insurance, a deductible is an amount you must pay (predefined) before your coverage kicks in. Sometimes deductibles can be waived on an auto insurance policy, but it is not always clear when this is an option.
Sometimes the auto body shop will waive the self-insurance, and sometimes insurance policies have scenarios (waivers) where deductibles do not apply. You may have a waiver on your policy and not even know it.
The purpose of this article is to break down deductible waivers in detail, lay out some common scenarios, and leave you prepared to face an insurance company. Specifically touched on are….
Let's get started….
One way to guarantee that you will not have to pay for a deductible is to purchase a plan (or extension) that offers a collision deductible waiver (CDW). A CDW will reimburse or waive the deductible you'd typically have to pay to repair your car if involved in an accident (and there is no other policy to claim against).
For example, if your deductible is $1,000, the CDW would cover that expense in exchange for a nominal increase in your monthly premium. A lot of CDWs depend strictly on the circumstances you find yourself in. For example, some will only pay if you're in an accident with an at-fault party who is uninsured -- others will only pay if you're hit by a driver with the same insurance, or if your car is a total loss.
According to the Insurance Information Institute, the number of uninsured drivers on the road at any given time is likely to exceed 10% . Purchasing a CDW add-on can help protect you from this, and it's particularly useful if you have a high collision deductible. However, CDWs do not apply in the case of a hit-and-run or miss-and-run accident.
Other than purchasing provisions that waive your deductible, there are some scenarios where you may be able to skip paying for it.
Also, if the other driver is insured and found to be “at fault” their insurance company may have to pay for your deductible.
In short, yes. Generally speaking, an auto body shop that is offering to take care of the deductible for you is most likely doing something unethical and possibly doing something illegal.
Occasionally these deals are on the up and up, but most often what's happening is this:
This is fraudulent behavior which most insurance companies are savvy to and willing to take action against. The other thing to consider is this: if the shop is willing to be slightly dishonest with the insurance company how can you know they'll be honest with you?
Whether or not you pay a deductible depends entirely on what state you live in, which insurance company you're dealing with, what type of policy you have and what are the circumstances of your claim. Although there are a few scenarios where you don't have to worry about paying the self-insurance more often than not making a claim means paying your deductible. To review:
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