Question: I was in an accident. I was at fault, but all I have is a scratch. My insurance company is telling me even though I'm not getting my car repaired I’ll have to pay the other driver’s deductible. Is this correct?
Answer: Since you‘re insured, you personally shouldn’t have to pay for the other driver’s deductible, but your car insurance company may be paying it depending upon how the other driver made his claim.
The other driver had the choice of making a claim through your property damage liability coverage -- since you were at fault -- or his own collision coverage.
If he chose to file the claim through his collision coverage, he would have had to pay his collision deductible amount. The repair costs above his deductible amount would be paid by his car insurance company.
Once the collision claim was paid out, his insurance company would pursue your car insurance company -- through your property damage liability coverage -- for reimbursement since you were the at-fault driver. In addition to what it paid out, his car insurance company would ask for repayment of the deductible amount as well.
This process of requesting reimbursement is called subrogation in the insurance world.
Now, if the driver instead put the claim directly through your property damage liability coverage, then your insurance company would pay for all the repair costs for the damage his car sustained in this incident. There would be no deductible paid by anyone in this situation.
The only way you would personally have to write a check is if you were uninsured. The other driver would put his claim through his collision coverage, then his insurer would have come after you personally to reimburse it for what it paid out for the claim, plus the deductible the driver paid.
It could be that there is a misunderstanding regarding claims terms between you and your car insurance provider regarding this accident and resulting claims, especially if your liability coverage paid. You can speak to your insurer’s claim department about this and seek clarification on how the claim was placed by the other driver.
Will your rates go up as a result?
When speaking to your car insurance company you can also see how this accident will affect your future car insurance rates by asking for a surcharge schedule. This document should tell you how accidents, claims and traffic violations can affect your car insurance rates with your current carrier.
Since this was an at-fault accident and the other party has repair costs to be covered, it’s likely that the surcharge schedule will say your rates will be affected if the claim was over a certain monetary amount. For instance, a 20 percent surcharge is not uncommon -- but it varies by insurer, so the surcharge could be more or less.
Even though you didn’t make a claim for your damages, the other driver’s claim will likely cause your rates to rise. If that is the case, be sure at your next renewal period – when your surcharge will kick in and raise your rates – that you compare car insurance quotes with other providers to find the best rates available.