Today we’re going to talk about a commonly misunderstood aspect of car insurance as evidenced at our Albany NY insurance agency.
What is a car insurance deductible?
A car insurance coverage deductible is the money you pay toward an accident or a claim. You will pay the deductible out-of-pocket when you file a claim with your insurer under certain coverages. You may see deductibles for coverages such as comprehensive, collision, property damage, and personal injury protection.
Let’s say you carry collision coverage with a $500 deductible and are involved in an accident that causes $3000 of damage to your vehicle. If you file a claim with your insurance company, you will pay the $500 collision deductible and your insurance company will pay the remaining $2500 towards your car repair.
In most situations, you get to choose the deductible amount for each coverage. For that we suggest choosing an amount you’d be comfortable paying out-of-pocket. Don’t select a deductible that’s higher than you’re able to pay just to get a cheap NY car insurance premium. $500 is the most common deductible amount chosen but with most companies you can go lower or higher than $500. Keep in mind that if your vehicle is financed or leased, the lender may place a restriction on how high your deductible can be, but all lenders as far as I’m aware are good with a $500 deductible.
Of course, the deductible amount impacts your auto insurance premium. Choosing a low deductible amount will most likely increase the premium and a higher deductible will lower your premium.
In NYS, Personal Injury Protection or PIP coverage commonly has no deductible or a low deductible amount of say $100 or $200. All of the companies we use have no-deductible PIP options which is what we utilize. In our experience, carrying a deductible on PIP coverage has minimal impact on premium.
Glass coverage typically follows your comprehensive coverage deductible amount unless you request to have full coverage glass on your vehicles or vehicles, in that case, you would not have a deductible for a glass claim. There are some insurers that offer a separate deductible amount for glass, but again, we’ve found that it has minimal impact on premium and most people want full glass coverage with no deductible.
Keep in mind if you’re in an accident that causes damage to your vehicle and it’s the other driver’s fault and their insurance pays to repair your vehicle, you do not have to pay a deductible. On the other hand, if you file the claim with your own NY car insurance company even though the other driver is at fault, your insurer will still most likely require you to pay your deductible upfront. In this instance, if the other driver is deemed at fault for the accident, your insurance company will attempt to get the cost of the claim back from the at fault driver’s insurer, also known as subrogation. Once that money is retrieved from the other insurer, your deductible amount paid will be refunded back to you.
So a depressed deductible walks into a bar, orders a full glass coverage drink and the bartender asks … why do sad? The deductible says … Because I’m only cared about by accident!
Our apologies, it’s so hard to write a good insurance deductible insurance joke!
So check your policy, see what your deductibles are. If you’re unsure, call your agent, or feel free to call us here at the NY Insurance Hub anytime, we’re glad to help.
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