You Can't Afford Your Insurance Deductible. Now What?

If you need to make an insurance claim but you can’t afford your deductible, you could take out a loan, hold off on making your claim, or consider payment plans.
Written by Houston Wiltsey
Reviewed by Kathleen Flear
If you need to
make an insurance claim
but you can’t afford your deductible, you could take out a loan, hold off on making your claim, or consider payment plans.
Surprise! A tree fell on your car. That high deductible sounded great when you were only thinking about the low monthly fees but now you have to pay the bill.
But what happens if you can’t pay the bill?
, the
car insurance
has compiled what you need to know if you’re on the hook for an auto insurance deductible you can’t afford.
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What is an auto insurance deductible?

Simply put, an
auto insurance deductible
is the amount of money you are required to pay out-of-pocket for an accident before your insurance company pays the rest.
For example, if you file a claim for $2,000 and you have a $500 deductible, you will have to pay the $500 deductible before your insurer will cover the remaining $1,500 balance.
Unlike medical insurance in which the provider covers the cost for certain services after reaching the fixed dollar amount, auto insurance resets every time.

What to do if you can't afford your insurance deductible?

Take out a loan

If the damage to your vehicle is more than just cosmetic, you might have to consider taking out a loan to pay your deductible.
If you decide to go this route, your options include a
personal loan
, a cash advance on your credit card, or a payday loan.
What’s nice about payday loans is that they rarely require a background check and you usually receive your money within one business day.
Watch out for the interest rates, though. While some states have strong rate caps, interest in other states can creep
above 600%
. You will also need to leave a form of payment, such as a credit or bank account number, in order to repay the loan when your next paycheck arrives.

Double-check your policy

If you’re on the hook for a deductible you can’t afford, read the fine print of your policy (cue the magnifying glass!) or discuss your policy details with your insurer.
You might discover that you don’t have to pay your deductible until after your vehicle repairs are complete. Instead, your insurer might subtract the amount of your deductible from your claim. For example, if you have a $3000 claim and your deductible is $500, your insurance company will pay you $2500.

Hold off on filing your claim

If the damage is more cosmetic and does not affect the performance of your car, you might consider
waiting to file your claim
Not only will this give you some time to wait for your next paycheck, but it also gives you the opportunity to shop around for a well-reviewed, affordable mechanic.
There are some additional factors to consider if you should hold off on filing your claim. If your vehicle has already been towed or moved to a lot, the storage fee to keep it may end up costing you more money in the long run.
Second, you need to be aware of your state’s statute of limitations on filing a claim after an accident. This is the
amount of time you have to file a claim
after the accident occurs. You only need to worry about this if you are waiting more than two weeks to raise the necessary funds to pay your deductible.
Most insurance companies recommend filing your claim as quickly as possible in order to ensure that the process goes smoothly and you get your money fast.

Inquire with your mechanic about a payment plan

If you can’t afford your deductible, you might consider talking with your mechanic about different payment options.
Some repair shops might be willing to come up with a payment plan that helps get you back on the road quicker without having to take out a loan.
In both cases, make sure to ask about payment plan options before the mechanic starts work on your vehicle. In most states, mechanics are entitled to hold onto your vehicle until payment is complete.

Dip into emergency savings

If you have an emergency savings fund, now is the time to dip into it, especially if you use your vehicle to get to work.
The days you could lose by not going into the office—not to mention the stress you’ll feel having to organize rides for your kids or significant others—means it is money well spent.
If you don’t have an emergency fund, now is your chance to get ahead. Set aside $50 or $100 dollars to start and try to add to it each month. Even if it’s just a small amount you’ll be surprised at how quickly it adds up and how it could save you from having to worry about a situation like this in the future.
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Do I have to pay my deductible if I'm not at fault for the accident?

The short answer is no.
The vast majority of the time, the at-fault driver's
liability insurance
will cover your expenses after an accident.
However, there are some instances in which the insurance adjuster takes a long time to determine fault, which can affect when you receive compensation. In those cases, it's best to pay your deductible—if you can—and get your repairs taken care of quickly.
Once your insurance company recoups your costs from the at-fault driver’s insurer, they will refund you the correct amount.

How do I get a lower auto insurance deductible?

You should always be able to afford your deductible if the need arises. If you can’t afford your current deductible, download
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