How much you will be responsible for after you file a claim?


Know what your out of pocket expenses will be!

Just like other types of insurance, auto insurance comes with a menu of options including coverage and deductible limits.  Usually, the higher the deductible you choose, the lower your cost of insurance. The amount that you choose as your deductible will equal the amount that you will pay out of pocket before any further payments can be made from your insurance policy in certain situations when you file a claim.

How does this work with my policy?

If you have a loss and need to file a claim, your policy will warrant the amount that will be paid after all deductibles have been met.  There is usually a deductible that you will choose with comprehensive coverage, collision coverage and auto lease gap coverage.  Sometimes there is a choice on personal injury protection and on uninsured/underinsured motorist insurance coverage.  Liability insurance will not have a deductible, however, there will be policy limits in this area.

Example of how this might work…

Let’s take the following scenario: you are in an auto accident and it is determined that it is your fault. You have both comprehensive and collision coverage. First, your deductible is used to pay the first part of the repair bill for your car.  The balance above the deductible amount (up to a maximum of the cash value of your car), is paid by your auto insurance company.

Let’s say that you are in an accident and you have damage adding up to a $6,000 repair bill.  You had purchased insurance with a collision deductible of $1,000.  In this case, you will be responsible for the first $1,000 payment out of pocket.  Your insurance company will pay the balance of $5,000 assuming your auto’s cash value is at least $6,000.  If your total cost of repair was less than the deductible, say $900, you would pay the whole thing yourself.

So someone else runs into your car and it is determined it is their fault… what happens then?

Sometimes it seems confusing because claims can take time to be reported by all parties and to be settled.  Often, people are anxious to get their car fixed and get back on the road. If this is the case, you might want to pay your deductible up front and get your auto fixed, even if another driver was at fault.  There is a procedure called “subrogation” that makes a determination after all the facts are in,  and this sometimes results in you getting your deductible paid back to you by the “at fault” insured’s company.


Some insurance policies will give you the benefit of “full coverage” if you have a broken windshield or window.  Usually you will not have to pay a deductible for broken glass. Talk to your insurance agent to make sure you know what to expect if you have to file a claim for broken glass.

Your auto has been stolen…

If your auto cannot be found, your comprehensive coverage will pay you the actual cash value minus your deductible, as your settlement for a stolen vehicle.  If your auto is found, but is damaged, you will pay your deductible before the insurance coverage kicks in for the cost of repairs. 


What if your car is hit by an uninsured driver?

If your auto is damaged by an uninsured driver, and you have collision coverage, a collision deductible waiver may allow you to skip the deductible. If this type of waiver is available, you should add this coverage to your policy when you purchase auto insurance.

Making the right coverage choices…

Taking risks vs. paying a higher premium…If you choose higher deductibles and lower coverage limits, you will have lower insurance premiums.  If you have a good deal of money to back up unforeseen events such as an auto accident, you may want to choose higher deductibles to lower your premiums. On the other hand, if you are not in a position to risk coming up with a good deal of cash to cover losses as they happen, you may want to consider purchasing high coverage limits with low deductibles when you piece together your auto coverage.

This will give you peace of mind.  

By Craig Bruno

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