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….
What is a Collision Deductible Waiver?
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.
When Is Your Car Insurance Deductible Waived?
Other than purchasing provisions that waive your deductible, there are some scenarios where you may be able to skip paying for it.
- Collision coverage — if you have a policy known as “broad collision coverage” your deductible will be waived if you are less than 50% responsible for the crash. If you are deemed to be above 50% responsible, you will pay the deductible in full. If your insurer can be reimbursed from another source for the accident they may refund part of or all of a paid deductible.
- Glass replacement — if you read the fine print, you’ll typically find coverage for damage to a windshield (or window) located in the line item “glass” in the comprehensive section of an insurance policy — this section is responsible for damage to your vehicle above and beyond damage sustained in a crash. This subsection of the policy likely has a much lower deductible or may be deductible-free. If you need a cracked windshield replacement and aren’t sure, check your policy or call your agent.
- Uninsured Motorist Property-Damage — an uninsured motorist protection-damage policy (UMPD) covers your vehicle in case you are hit by an uninsured driver. Collision policies typically have a deductible of at least $500. These policies tend to have a relatively small limit ($3,500 according to Sapling ), so if your car is worth quite a bit or damage is substantial you may be out of luck.
- Miscellaneous waivers — if you take your car to insurance carrier-approved auto body shops, some insurance companies will offer a discounted rate or waive the fee altogether. Other insurers offer this perk for problems like being locked out of your car. If you rent a car (and pay with credit card) sometimes you’ll be eligible for deductible-free repairs under the card’s policy. This generally does not apply to liability though, so be aware.
Also, if the other driver is insured and found to be “at fault” their insurance company may have to pay for your deductible.
Should You be Wary of Auto Body Shops Who Offer to Waive the 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:
- The auto body shop inflates the cost of the estimate to account for the deductible
- You choose the auto body shop because of the waived deductible
- The insurance company picks up the tab ignoring the deductible that is in your insurance contract
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:
- A collision deductible waiver is an add-on that you can purchase which specifically waives your deductible in defined loss scenarios.
- Deductibles can be waived in some circumstances (depending on which state) such as being less than 50% at-fault, claiming for glass repair or having uninsured motorist property damage coverage.
- As a general rule, it’s good to be wary of auto body shops that offer to waive a deductible. The odds are high they’re doing something underhanded.
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