Do I have to pay a deductible before the insurance company will process my claim?

If you’re working out how to file an auto insurance claim, you may wonder what happens with your deductible. For example, you might ask, “Do I need to pay my deductible before the insurance company will process my claim?” We understand this can be confusing, so read on for answers below.

You Don’t Need to Pay a Deductible to the Insurance Company Before They Process Your Claim

The insurance company will only apply your deductible when they settle your case. In other words, they will subtract the amount from the sum they will pay for the claim.

Sometimes, the company will pay the amount directly to the repair shop; at other times, they may cut you a check. Talk with your insurance company to find out how they will proceed. You may also want to ask: “How long does it take for an auto insurance company to pay out a claim?”

Your State May Require Your Insurance Company to Charge You a Deductible to Process Your Claim

Many states insist that commercial insurance providers charge each policyholder a deductible. For example, New York states that there should be a standard deductible of $200 for each occurrence, although they may reduce this to no less than $50 on each anniversary.

This rule applies to fire, theft, or comprehensive insurance coverage risks. In addition, New York prohibits companies from offering a zero deductible on comprehensive or collision insurance coverage policies. You can read more to find out: “What is an auto insurance deductible and how does it work?”

Other Rules Apply to Deductibles When You File a Claim

Deductibles typically apply on a per-claim basis rather than annually. Also, a deductible may not apply to every type of coverage that you have on a certain policy.

Typically, you will always have a deductible for comprehensive and collision coverage, but this may not be true for other types of insurance like personal injury protection (PIP). Read more if you want to know “What is PIP in auto insurance?”

You Should Always Ensure That You are Up to Date With Your Policy Commitments

While an insurance company will not expect you to pay them the deductible amount upfront before they process your claim, you must be up to date with all the other terms of your insurance policy. So, for example, your payments should be up to date before you submit a claim.

You Can Often Choose a Deductible Amount You Are Happy With

In most situations, you can choose to pay a lower or higher deductible for your auto insurance. However, remember that there may well be a minimum, which may be a state requirement.

A higher deductible will typically result in lower car insurance rates but remember; there’ll be a higher out-of-pocket cost when you claim.

You May Be Eligible for a Zero Deductible in Select Cases

In certain states, insurance companies will waive the deductible if the customer files a claim to replace their windshield. They’ll need to have comprehensive coverage in place to do this.

You Don’t Need to Pay the Deductible Before the Insurance Company Will Process Your Claim

The insurance company will not ask you to pay your deductible upfront before they work on your claim. However, you must pay this out-of-pocket when the company settles your claim.

Then, they’ll either send you a check which is net of your deductible or send the net amount to the repair shop. You would then need to pay the amount of the deductible to the repair shop.