A deductible is an amount that you agree to be responsible for in the event of a loss under the coverage of your policy. It is the amount of money you will first be responsible for before the insurance company begins to cover costs. When you have an accident, your car insurance company will pay for damages up to your policy’s limit. Regardless how serious the accident is, you will only need to pay your auto deductible. For example, if you are in an accident and you have $5,000 worth of damage to your vehicle, and your deductible is $500, you will pay $500. Your car insurance company will pay the remaining $4,500.
Higher deductible policies come with lower annual premiums in exchange for the higher out-of-pocket expenses. Deductibles only apply to coverage types that pay your damages, such as collision or comprehensive coverage.
Deductibles do not apply to liability insurance coverage, as that pays for damages incurred by another driver when you cause an accident.
Many of Collision Service Network’s client business collision facilities offer deductible discounts and other premiums to CSN customers.
A Word About Deductibles and Premiums
Did you know that not paying your deductible is not a crime? That’s right! When your insurance company appraises your vehicle’s damages and reaches an agreed price with one of CSN’s 5-star collision facilities, the dollar amount that you agreed to pay in the event of a loss to your covered vehicle is withheld or “deducted” from the total estimated cost to repair your vehicle. Your personal auto policy is a contract between you and the insurance company. It defines the actions and expectations of both parties to that contract. Like any other contract, it is legally binding on both parties. So, your insurance contract is defined under contract law, and is generally a civil matter should any disputes or a breach occur. What this all means for most of the public is that in so far as the insurance company is concerned when they deduct the agreed upon dollar amount from your settlement prior to issuing you a check you have fulfilled your contractional legal obligation; that is, you have paid your deductible. It’s as simple as that. Therefore, you must choose a collision shop that offers deductible discounts to its customers such as one of CSN’s 5-star professional shops, many of whom do offer deductible discounts, deductible waivers, such as financial hardship, loyalty rewards programs and customer referral programs.
The insurance company will not ask if you paid your deductible or require an affidavit to affirm you paid; nor are there any New York State forms or certifications requirement. The insurance policy is a contract, which is an agreement between you and the insurance company. The act of withholding or deducting the dollar amount you agreed to pay means you have fulfilled your end of the bargain; your contractional obligation. What happens after the fact is between you and the body shop.
Therefore, not paying your deductible may be a moral issue, but it is not a criminal issue. There are circumstances which would alter this outcome from a private matter of contract law to a criminal matter. If someone enhances or inflates the dollar amount of the claim to defer or “cover” the deductible then they may have committed insurance fraud. Additionally, if money was offered to entice the adjuster to inflate the claim, includes other damages or you were made aware of this and were a party to it, other criminality may be triggered such as larceny or conspiracy to commit insurance fraud. Therefore, if you are involved in an auto accident, contact one of CSN’s professionals to insure you get the advice and guidance you need to file your claim accurately and to ensure you receive the full dollar amount of your claim. Choosing one of CSN’s body shops will represent your interest, negotiate on your behalf and ensure that your vehicle is repaired consistent with your expectations, not the insurance company’s.
When it comes to auto insurance coverage most of us know less than what we think we know and what we think we know is often confusing, misleading or conflated. In a sense, we know very little about a product we all need and must purchase to legally operate our vehicles here in NYS. Such insurance principles such as deductibles and premiums are the most commonly known but less understood. The premium is the amount of money the insurance company charges you for insuring or covering your vehicle. This cost is determined by a mix of business and financial parameters and can vary slightly from one company to another. These include credit history, driving record, claim history and frequency with your current company and within the insurance industry, age, sex, make and model of vehicle, geographical and regional location, and dollar amount of the coverage also known as policy limits.
Factors that may determine the cost are business use policies, high deductible policies, umbrella policies and specialized policies that allow only original equipment parts be used in the repair of the covered vehicle. These are less common factors, but do affect the cost of the premium. That’s why it’s important to choose an insurance professional from CSN’s network who will listen, inform, explain and make sure you get the right coverage and limits you require. We will advocate for you and your interest.
HAD A RECENT CAR ACCIDENT?
Our exclusive, member-only white paper will help you know what you need to know before you speak to your insurance company. Sign up to become a member today and gain access to this guide as well as other useful tools and network groups.