What Happens If You Can’t Pay Your Car Insurance Deductible?

Key Points:

• If you can’t pay your car insurance policy’s deductible, you may be able to work out a payment plan with your repair shop.
• Choosing a lower deductible may make repairs more accessible, but you’ll pay a higher monthly premium.
• Car insurance providers offer different choices of deductibles, so shop around until you find a provider with choices that suit your budget.

Maintaining car insurance coverage is one task, but filing a claim and handling the cost of repairs from an at-fault accident is another. What happens if you can’t pay your car insurance deductible?

If your deductible overshadows your budget, you have options. Read on to learn about your options in a pinch as well as how car insurance deductibles work and how to build your policy to fit your needs and budget, even after getting into an accident. If you’re not happy with your current provider’s deductible options, we’ll also discuss two of the best insurance companies from our in-depth industry-wide review.

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What Is A Car Insurance Deductible?

A car insurance deductible is the cost you pay out of pocket before your insurance company pays the remainder of the claim. If you’ve never had a car insurance policy or only purchased minimum coverage previously, you may not be familiar with this expense. Let’s say you file a claim that results in a $2,000 expense. If you have a $500 deductible, you must pay that amount before the insurer covers the remaining $1,500.

However, if you have a $500 deductible, but your car repair costs are only $400, you’ll have to pay the full amount of repairs without the auto insurance company’s help. Insurers aren’t responsible for expenses that don’t exceed your deductible.

At the start of most full-coverage car insurance policies, you get to choose your deductible. This can range from zero to thousands of dollars. However, the most common car insurance deductibles are $250, $500, and $1,000. You can find your deductible amount on your insurance policy’s declaration page.

So what happens if you need to file a claim and can’t pay your car insurance deductible? Drivers with low income or insufficient funds to cover deductible amounts may be able to work out a plan for paying the mechanic. Most insurers are willing to work with you and will even offer payment plans for reliable policyholders.

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How Do Car Insurance Deductibles Work?

When you start a full-coverage auto insurance policy, you get to choose the coverage amounts. Your insurance premium and car insurance deductible will change depending on the amounts you choose. Similarly, increasing your out-of-pocket deductible will lower your monthly insurance premium.

You can choose your deductible amount for each type of insurance coverage you add to your policy, and each should be handled differently:

Personal injury protection and underinsured/uninsured motorist coverage may also have deductibles. Talk with an insurance agent to learn how to choose your deductible and car insurance premium rates for these coverages based on your state’s rates.

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What Happens If You Can’t Pay Your Deductible?

When paying out an insurance claim, your insurer will often write you a check for the amount it’s responsible for covering. If you’re unable to pay the remainder of your costs for the deductible, you may have some options. Below are some steps you can take if you can’t afford to pay your deductible:

1. Discuss a payment plan with your repair or body shop: It could be worthwhile to talk to your mechanic about payment options after an accident. You might be able to negotiate with the mechanic to waive your deductible or for a payment plan.
2. Take your car to a different repair shop: If you decide to take your auto insurance payout check to another repair shop, it could mean cheaper repairs.
3. Continue to use your car until you can afford your deductible: Many drivers choose to use their car (if it’s still operable) until they can come up with the deductible amount. Waiting to file a claim is not uncommon, but it’s advised to submit a claim as quickly as possible.
4. Take out a personal loan: When a car insurance repair is urgent, taking out a loan might be the best option. It could help get you, your vehicle, and other parties involved back on the road more quickly.
5. Consider supplemental options: You can choose to use a credit card or ask family or friends for assistance to pay your car insurance deductible, but we recommend seeking advice from an expert before making any upfront financial decisions.

Don’t fret if you can’t pay your car insurance deductible after an accident right away. Knowing when to adjust your deductible and when to shop around for a new car insurance company with affordable rates is the safest way to avoid high expenses in the future.

Can You Make Payments On A Car Insurance Deductible?

Depending on the amount of your deductible, some mechanics may work with you and allow a monthly payment plan. This may mean that you’ll pay more over time, but it’s helpful for saving money on a lump sum all at one time.

If you simply don’t have the funds for the full repairs, try starting with the most important or necessary repairs, then work on the rest over time as you have the funds to cover them.

How Long Do You Have To Pay Your Insurance Deductible?

The amount of time you have to pay your deductible depends on the repair shop you choose. If you can’t pay your car insurance deductible, you can often work out a deal with your insurance company or the mechanic to handle your costs and get your car back on the road.

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Will Deductibles Affect Your Premium?

Your choice of deductible can raise or lower your premium. Before you choose your deductible, take the time to fully understand how basic car insurance works. Getting the full picture can help you become more confident on the road.

Your car insurance deductible is how you share the responsibility of covering losses with your insurance company. If you choose a lower deductible, you’ll pay a higher monthly premium.

Many drivers favor a higher deductible because it reduces monthly payments significantly. If you choose a high deductible, however, you’ll be required to pay a larger portion of your insurance claims if an accident occurs.

You should choose a high deductible if you wish to pay lower monthly premiums and if you’ve budgeted for that amount in the event of an accident. Select a low deductible if you can’t afford a larger one, or if you live in a busy metropolitan area where you’re more likely to get into an accident.

Talk to your auto insurance agent to discuss your deductible options. They’ll examine your situation and help you choose the best premium and deductible for your budget.

Can I Lower My Deductible Before Making A Claim?

No, you can’t change your deductible amount right before filing a claim. Take time to consider your auto insurance deductible before making a commitment. 

Your deductible amount is usually decided at the beginning of your policy and can’t be changed until that policy expires. Also, because the deductible amount varies based on your premium and vice versa, you can’t make this switch halfway through a policy.

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How Can You Avoid Paying Deductibles?

What happens if you can’t pay your car insurance deductible? If you’re at fault in an accident, there’s not much you can do.

At-fault drivers must pay the car insurance deductible to cover the damage caused by the incident. Mechanics are legally allowed to keep your car until its repair costs are taken care of. It may also be illegal for them to waive the deductible for you and overcharge the car insurance company.

Insurance companies may also take the deductible from your claim before paying out your benefits. For instance, if the cost to repair is $2,000 and you have a $500 deductible, your insurance provider could only write you a check for $1,500 or pay the mechanic their part of the expenses directly. This forces you to cover your deductible.

How Can I Get Out Of Paying My Deductible?

If you’re not at fault in an accident and another driver hits you, you may not have to pay your deductible. The at-fault driver’s liability coverage should cover the cost of damages.

It’s not ideal to try to get out of paying a car insurance deductible. Instead, try to start a small savings account that can hold emergency funds to handle things like a car accident.

Many car insurance companies, like Nationwide, have a vanishing or disappearing deductible program. With these programs, your deductible will decrease each year you go without getting into an accident and filing an insurance claim. It’s a great benefit if you ever get into an accident.

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Car Insurance Deductibles: Our Take

If you have minimum liability car insurance coverage, your policy protects others in the event of an accident. For this reason, no deductible is required when filing a claim with these policies, but you won’t get any coverage for damage to your vehicle or property. With full coverage policies, you can choose your deductible amount to help customize your monthly or overall policy rate. The higher the deductible you choose, the lower the rate you’ll pay. However, if you have difficulty budgeting for sudden vehicle expenses, you may want to choose a lower deductible.

Looking for an insurance company with solid coverage options and flexible deductibles? Try quotes from Progressive and USAA.

Progressive: Best For Usage-Based Insurance

Progressive auto insurance is available nationwide and is a great option for high-risk drivers. The insurer offers full coverage options and add-ons like roadside assistance, gap insurance, and rideshare coverage.

There are many available discounts, including those for safety features on your car, going paperless, and paying your premium in full. Progressive has an easy quote process, which allows you to compare other auto insurance companies right on its website. Progressive received 4.5 stars in our in-depth review.

Read more in our full review of Progressive insurance.

USAA: Best For Military Members

USAA auto insurance is known for its exclusive coverage for military members and their families. The company provides standard coverage, plus extra options like rental reimbursement and accident forgiveness.

USAA has great rates that are already highly discounted, but drivers can also unlock discounts like a good student discount, defensive driving discount, and new vehicle discount. USAA also earned a 4.5-star rating in our review.

Read more in our full review of USAA insurance.

See how these providers compare in our car insurance comparison articles: Geico vs. Progressive, Geico vs. USAA, and Progressive vs. USAA.

Once you’re ready to shop, get free car insurance quotes in our tool below.

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What If I Can’t Pay My Car Insurance Deductible: FAQ

Below, we answer some of the most frequently asked questions about what to expect when it comes time to pay your car insurance deductible:

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How We Rate Auto Insurers

Our review team extensively researches auto insurance providers to deliver informed and unbiased assessments of leading companies. We evaluate several key rating factors that are important to consumers to determine which providers are the best in the industry:

• Reliability: It’s important that an auto insurer is able to meet its claims obligations. Companies with a strong financial strength rating from AM Best score best in this category. Established insurers with a long history of reliable service also receive positive marks.
• Availability: Insurance companies that offer wider availability to consumers in terms of state availability and few eligibility requirements are more likely to meet consumer needs.
• Coverage: To determine our coverage score, we look at the number of coverage options available as well as coverage limits and deductible options. Our ratings also take into account additional services and benefits like roadside assistance.
• Pricing: Cost can be difficult to compare between insurers because so many factors impact annual premiums. The cheapest insurer for one driver may not be the cheapest for another. To determine our cost score, we look at insurance rate estimates generated by Quadrant Information Services, discount opportunities, and consumer reports.
• Service: We comb through customer reviews on sites like the Better Business Bureau (BBB) to learn about customer experiences. Insurers with a low volume of complaints score well in this area. We also consider the claims process, giving higher ratings to car insurance providers that offer a smooth experience.
• Technology: Providers with an online quote tool, easy-to-use claims app and a usage-based insurance app score best in this category.

*Data accurate at time of publication.

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