As a car insurance policy holder, when a car accident occurs it is a relief to be able to say "I'm covered." But bear in mind that most car insurance policies require the policy holder to take some type of responsibility for an incident in the form of a deductible.
Claims Process
When you experience an incident while driving and wish to use your insurance coverage you must call the insurer to open a new claim. You must provide your policy information, date of the incident, police report and a full description of the occurrence. The insurer sends an adjuster to evaluate the damage and estimate the cost to return the car to an acceptable condition. When approved the insurer sends you that amount less the deductible.
What Is a Deductible?
The deductible is a sum of money that you have to pay to contribute to fixing your car in case of an incident. So for instance, if the insurance adjuster estimates $3,000 worth of damages and you have a $250 deductible, the insurer will pay the difference of $2,750. Generally the higher the deductible associated with the policy for each incident involving the car, the lower the policy premium.
Who Pays?
The person who ultimately pays the deductible in case of an accident depends on who is at fault in the accident. If the other driver is at fault he must process the claim through his insurer and pay the deductible. If you are at fault or it is determined that the incident was a no-fault accident you would have to pay the deductible related to your own claim.
Considerations
Some car insurers offer low or no deductible policies. Even though it may seem like an inconvenience to have to pay a deductible on a claim, you have to consider the extra premium costs you would pay if you choose a no or low deductible policy. For instance, say the cost of a very low $100 deductible policy is $1,400 a year while a $500 deductible is $1,000 per year. If you continue to pay the higher premium of $1,500 for years and then have an incident requiring a claim, you would end up spending a lot more on the policy premium than the extra $400 for the claim deductible. Also, you can look into "vanishing deductible" policies that reduce your premium each accident-free year.
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