Collision Deductible Waivers Explained

A collision deductible waiver is added as an option to some auto policies to protect you against underinsured drivers. Coverage costs only an extra $20 a year. A collision deductible waiver is added as an option to some auto policies to protect you against underinsured drivers. Coverage costs only an extra $20 a year.

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UPDATED: May 21, 2020

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Here's what you need to know...
  • A collision deductible waiver can be used as additional protection against uninsured or underinsured drivers
  • Some but not all states require collision deductible waivers to be included on insurance policies
  • Adding a collision deductible waiver to your policy is usually inexpensive but still beneficial

If you’re ever unfortunate enough to be involved in an auto accident with another driver who has insufficient insurance, a collision deductible waiver could save you from having to pay some of the costs associated with repairing your vehicle.

A collision deductible waiver is a clause added as an option to some auto policies, which already include collision coverage, as a means of protecting the policyholder against underinsured drivers.

Some states require that a collision deductible waiver is included on every policy that has collision coverage; some states make it voluntary.

Regardless of the car insurance regulations in your state, if you’ve invested more than a couple of thousand dollars in a new car, you would be very wise to get collision coverage along with a collision deductible waiver.

Compare car insurance rates from companies in your state by entering your ZIP code below.

How do I get my insurance deductible waived?

Collision coverage pays to repair or replace your vehicle if it’s damaged in an accident. But almost all collision policies require some sort of deductible payment from the car owner.

Standard collision insurance assumes that other drivers who might be involved in the accident also have sufficient insurance coverage to pay any expenses they might be liable for.

The collision deductible waiver comes into play when other drivers don’t have sufficient insurance.

For example, imagine that you were rear-ended by another car while stopped at a traffic light. All rear-end accidents of this nature are considered to be the fault of the driver who hit the stopped vehicle.

Likewise, your insurance company would place the blame on the other driver and go after his insurance company to pay for the repair or replacement of your vehicle.

Now, suppose the driver who hit you was either underinsured or had no insurance at all. In order for your car to be fixed, your collision policy would have to pay the bill.

You’d be left to pay your own deductible for an accident that was in no way your fault. The collision deductible waiver takes care of that by paying your deductible for you.

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How do I know if my insurance policy includes a collision deductible waiver?

One way to find out if you carry this protection on your car insurance policy is to look through your insurance declaration which should list everything that your policy includes such as a waiver for the collision deductible.

If you do not want to take the time to find your declaration or if it is confusing to you, the best thing would be to call your insurance company and find out from them directly.

If you have a personal agent that you work with, call them first. They can let you know what coverage you have and add it right away if you do not have it.

If you do not have an agent or broker, you can just call the customer service department of your insurance company and speak to a representative.

Make sure you have your policy number handy so you can find out the answer to your questions more quickly.

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Is a collision deductible waiver expensive to add to my policy?

If you are considering adding a collision deductible waiver to your current policy, you may be wondering if it is expensive and if it is worth the extra amount.

For most car insurance companies adding this waiver is relatively inexpensive but remember to take into account the amount of your deductible. Coverage usually costs only $20 a year.

If it is a high deductible, it would be a very good idea to add the deductible waiver so that you do not have to pay a lot out of pocket if you are in an accident.

If your deductible is lower and you won’t have a problem covering it, you may decide to take a chance and save money on a monthly basis by not getting the waiver.

If the deductible waiver is not required by your state you will have to decide, based on your financial situation and needs, whether you should add it or not.

If you still have questions about collision deductible waivers you can check out the website of the National Association of Insurance Commissioners.

Is a collision deductible waiver the same thing as uninsured/underinsured coverage?

Some states require that every driver carry a minimum amount of coverage for uninsured/underinsured drivers. This coverage is not the same thing as a collision deductible waiver.

Uninsured/underinsured coverage only pays for bodily injury and property damage claims but never pays collision claims.

A collision deductible waiver is additional coverage over the state minimums for uninsured/underinsured drivers.

Also remember that a collision deductible waiver will not pay for property damage or bodily injury. It only applies to the collision portion of your policy, replacing or repairing your car when damaged in an accident.

Thankfully, the limited amount of coverage generally means you can have the clause added to your policy for a relatively low price.

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What if I’m involved in a hit and run accident?

Some states require that the other driver is identified before a collision deductible waiver can be used.

  • In theory, this is a good idea because it helps to mitigate the risk of insurance fraud by those who would stage fake accidents and then file a claim
  • In reality, however, it makes it difficult for people involved in legitimate hit-and-run accidents to make use of their collision deductible waiver until the guilty driver is found

Because the driver is sometimes never found, insurance companies encourage their customers to write down as much information as possible immediately after an accident.

In a hit and run situation, if you’re able to get the license plate number of the other driver involved, you may be able to help the police identify the driver more quickly.

A collision deductible waiver is a good way to add extra collision coverage to your vehicle at very little cost.

As the prices of cars climbing higher every day, the more protection you can have for your investment the better off you are.

If you don’t already have a collision deductible waiver, then contact your insurance agent today to discuss your options.

Enter your ZIP code right now to see competitive car insurance quotes, including collision deductible waivers, from America’s top companies.

References:

  1. http://www.investopedia.com/terms/c/collision-damage-waiver-cdw.asp?ad=dirN&qo=investopediaSiteSearch&qsrc=0&o=40186
  2. https://www.allstate.com/tools-and-resources/car-insurance/what-is-collision-insurance.aspx
  3. https://www.progressive.com/auto/insurance-deductibles/
  4. http://www.naic.org
  5. https://www.libertymutual.com/auto/car-insurance-coverage/property-damage-coverage
  6. https://www.libertymutual.com/auto/car-insurance-coverage/bodily-injury-liability

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