What do I do if I can’t pay my insurance deductible?

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Joel Ohman
Founder, CFP®https://res.cloudinary.com/quotellc/image/upload/insurance-site-images/ciccom-live/41b5e36b-joel-ohman.jpg

UPDATED: Mar 26, 2019

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Here's what you need to know...
  • Your insurance deductible is the amount of money you must pay before your insurance company takes over
  • There are limited scenarios where you can avoid paying your deductible
  • If you cannot afford your deductible, you can sometimes have it waived, or you will have to apply for a loan

If you can’t pay your car insurance deductible, you could be in trouble.

Many insurance companies will not pay for repairs for a vehicle after an accident until after you pay the mechanic the initial deductible amount.

You should know the terms of your policy before you sign on the bottom line.

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What is an insurance deductible?

A car insurance deductible is an excellent way to decrease the amount of money that you pay in your premiums each year.

The higher your deductible, the less expensive your car insurance is going to be.

However, that means that the higher the deductible, the more you will have to pay out-of-pocket if you have an accident.

For many people, even a $500 deductible is too much to pay.

The option is to reduce the deductible, which may equate to a monthly premium that is too high as well.

It seems like a Catch-22, but the good news is there may be a way to still keep your higher deductible but work out the payment due to the mechanic fixing your car.

How can I avoid paying my deductible?


Well, the truth is that you aren’t likely to be able to avoid paying the deductible, although you can try.

Instead of communicating with the insurance company, you are going to have to talk to the mechanic in charge of fixing your vehicle.

First of all, you can ask the mechanic to bill the insurance company, minus the deductible, and allow you to make payments to them for the balance of the bill.

The downside to doing this is that the mechanic may agree under the condition that they can keep your vehicle until the debt is paid. Keeping a vehicle is legal and allows a repair shop to make sure they recoup their costs.

If you can’t work until your vehicle is back in your possession, you could face a dilemma.

The other option is that you can ask the mechanic to bill the insurance company, minus the deductible, and then ask them to waive the deductible completely.

Although this is a less likely scenario in terms of the mechanic saying yes, it doesn’t hurt to ask.

If your bill was a large one, the mechanic may consider waiving the $500 because they made so much off of the repairs in the first place.

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Is it illegal to ask the mechanic to waive the deductible?

It is not illegal to ask the mechanic to waive the deductible. However, it is illegal for the mechanic to overcharge the insurance company in an effort to recoup the cost of waiving the deductible.

Another thing that would be illegal would be to ask the mechanic to use after-market parts and charge the insurance company for company direct parts so that you won’t have to pay the deductible.

Providing false information or asking a company to do it for you is considered fraud, and you could actually go to jail for such actions.

You could lose a lot more than just your car if you try to defraud the insurance company.

What should I do if my insurance company requires me to pay my deductible up front?


Many insurance companies do require you to pay before they pay but not all.

If you have an insurance company that has this requirement, and you don’t have the money to pay it, your options are limited.

One thing that you can do is consider a loan.

If you are in this situation, a payday loan may be an acceptable alternative.

While the interest rates on such a loan are high, they don’t require a credit check and you can get the money in 24 hours.

The bottom line is that you are going to have to figure out how to pay your deductible or deal with a broken down car.

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