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Q

What exactly does the $500 deductible mean if you have an accident and it is not your fault? Do I still have to pay that fee?


A

A deductible is a dollar amount, which a policyholder chooses when setting up their insurance policy, that the insured must pay on each loss to which the deductible applies. The deductible is due when your policy is covering a loss which there is a deductible associated with that coverage. Usually this applies to your comprehensive or collision coverages.

How the deductible works isĀ for example if the cost for repairs to your vehicle is $2500 and your deductible is $500 then you would be responsible to pay the first $500 and then the insurance company would be responsible for the $2000 above the deductible amount.

Fault has nothing to do with if a deductible is due usually. The deductible for your collision or comprehensive (physical damages) coverages is normally due no matter if you are at fault or not at fault in the incident that caused the damage which you are making a claim on. If you are making a first party claim through your own insurer the deductible amount is due.

It may be possible to be reimbursed for your deductible though if you are found not at fault and your insurance company then goes after the at fault party to recover the monies paid out for the damages they caused, this is called subrogation.

Most policies have a subrogation clause that enables your insurance company to obtain reimbursement from the at-fault party's insurance company for the cost of repairing your vehicle. This is the amount your insurance company actually paid out plus your deductible amount.

If you do not want to pay your deductible amount and you are not at fault in an accident then in most states you can file a third party claim with the at-fault party's insurance company. By filing a claim with the at-fault party's insurance carrier you will not be required to pay a deductible.

If you do use your own insurance coverages for your damage and pay out a claim you can ask your insurance company to try and recoup your deductible amount for you during their subrogation process. Your insurance company may not be able to get back your deductible amount. If that is the case then you can check into your state laws to see about going after the at-fault party in court to sue for your deductible amount.


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