What Happens if You Can't Pay Your Insurance Deductible?

In order to receive insurance benefits after filing a claim, you must first meet your deductible. Here’s what to do if you can’t afford it.
Written by Liliana Pina
Reviewed by Carrie Adkins
No matter where you live, purchasing a comprehensive insurance package ensures that your finances and personal belongings remain protected in the event of an
accident, disaster, or other covered emergency
But when it comes to filing an insurance claim, providers will only reimburse you for the cost of repairs after you pay your initial deductible, or the amount of money you must pay out-of-pocket in order to start receiving your insurance benefits. In the event that you can’t afford your deductible, you must handle the situation before it spins out of control. If you discover you can’t pay your deductible, here’s what to do to remedy the situation.

I can’t pay my insurance deductible. Now what?

An insurance agreement is a contractual obligation, meaning that you must uphold your end of the bargain in order to keep your existing plan and continue receiving benefits. Being able to afford your insurance deductible is part of this agreement, and your provider is entitled to withhold all insurance benefits until the customer reaches their deductible threshold in out-of-pocket costs that occur after an accident or emergency.
In the event that you cannot afford your deductible, but would still like to receive reimbursement from your insurance provider, here are a few options to consider:
Wait until you have the money before filing the claim: After immediately documenting the issue via photo and video evidence, you can simply wait until you can afford your insurance deductible before filing a claim. It's imperative that you know your policy’s statute of limitations (typically less than one month) to ensure you still receive the maximum benefits to which you are entitled. If you select this method, you should refrain from utilizing your damaged vehicle (in the case of car insurance) if the needed repairs pose a significant hazard to yourself or others.
Consider taking out a payday loan: Though this option allows you to access money fast, payday loans come with a strict set of terms and conditions that detail how much money you can take out (capped at $500) and when it must be paid back (typically the day you receive your next paycheck). It is not a fantastic long-term situation, but it is a reasonable option to consider if you are ever in a financial pinch and need funds in hand as soon as possible.
Ask your local mechanic or repair shop for a payment plan: Because your insurance provider covers the cost of damages after your deductible is met, you may be able to broker a deal, discount, or payment plan with your local mechanic or repair shop in the event of a car insurance claim.
Keep in mind that most states have laws that allow car repair facilities to keep your vehicle in their care until your entire shop bill is paid, so make sure you get a written agreement with terms that you know you will be able to meet before relying on this method. If your current mechanic declines your offer, consider your repair options, and perhaps
hire another mechanic
who can better satisfy your needs as a customer.
Find more affordable car insurance: If you frequently find yourself struggling to pay your insurance deductible after an accident, you should consider taking out a different policy or purchasing a plan from a more affordable provider. While lowering your deductible in exchange for higher monthly rates is not always ideal, it's an option you night want to consider.
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