No, You Don’t Have to Pay Your Deductible If You’re Not At-Fault
If you’re not at-fault in an accident, then you should not have to pay your deductible. Typically, the at-fault driver’s insurance company will pay your deductible.
After the collision, the at-fault driver’s insurance company will estimate the amount of damage to your car. Then, they’ll pay you the required amount of money for repairs, or they’ll pay the amount your car was worth at the time of the accident. When you go through this process, you’re not filing a claim on your own insurance policy – so you don’t need to pay your own deductible.
However, some people recommend going through your own insurance company – even if the other driver was at fault.
Why Should You Go Through Your Own Insurance Company?
The biggest advantage is time. If you file a claim with your insurance company, you’re going to receive compensation much more quickly than you would than when dealing with the at-fault driver’s insurance company.
That’s because you’re not a client of the at-fault driver’s insurance company. If you’re not a client, these companies are more likely to drag their feet, delay the process, and prioritize other customers over you.
Fortunately, going through your own insurance company doesn’t necessarily mean you need to pay. Instead, your insurance company might begin the process of “subrogation” to recover any money you – and your insurance company – had to pay.
How Subrogation Works
“Subrogation” is an unfamiliar term outside of the insurance industry. Unless you’ve made insurance claims in the past, you may have never heard of the term.
Understanding what subrogation is – and how insurance companies use it to recover costs – is important when you’re trying to recover your deductible from an at-fault driver.
Subrogation is defined as a legal right that allows one party (like your insurance company) to make a payment that is actually owed by another party (like the at-fault driver’s insurance company), then collect the money from the other company after payment has been made.
Typically, car insurance companies use subrogation to recover any money paid after a collision where you were not at fault.
Subrogation comes at the end of the claims process. In many cases, your company will go through the subrogation process without you even knowing about it. It’s a behind the scenes process where money is transferred between insurance companies.
Your Insurance Company is Required to Inform You of the Subrogation Process
By law, your insurance company is required to inform you of the subrogation process. They’re required to do this for two reasons:
- If your insurance company is trying to recover costs through subrogation, then they’re required to recover your deductible as part of the process, then refund that deductible to you. Your insurance company cannot try to “pocket” your deductible
- Typically, your insurance policy has a section explaining that you’re required to cooperate with any attempts by the insurer to pursue subrogation. This isn’t usually a concern for drivers. However, one of the most important sections is the part that forbids you from signing waivers or agreements releasing the other driver from responsibility after he or she has already been judged at-fault for the incident. If you do this, then your insurance company may not be able to begin the subrogation process, and they won’t be able to recover their payments.
You Can Still Recover Your Deductible Outside of your Insurance Company
Typically, your insurance company will pursue the subrogation process for you. You don’t need to do anything to recover the deductible – the insurance company will recover their payments and your deductible on your behalf.
If your insurance company doesn’t begin the subrogation process for any reason, then you can still attempt to recover the deductible from the other driver or his insurer. Doing so requires you to contact the other insurance company and explain the situation. Alternatively, you can approach the other driver, then let the other driver deal with his insurance company.
What About If You Were Partially At Fault?
How do you recover your deductible in a situation where you were partially at fault? In this situation, you’ll pay a deductible relative to your involvement in the accident.
If it found that you were 40% at fault for the collision, for example, then you’ll receive a 60% refund of your deductible (assuming your insurance company decides to subrogate your claim).
“Waiver of Subrogation” Might Prevent You From Getting Your Deductible
Make sure you read your insurance policy for any conditions explaining subrogation. Many insurers will insert a section called “waiver of subrogation”, for example.
This clause is designed to protect your insurance company if you waive subrogation after an accident. In this situation, the insurance company may refuse to pay your claim because they will not be able to seek reimbursement from the other driver’s insurance company.
Ultimately, in most cases, the process of recovering your deductible from the at-fault driver has nothing to do with you. If you do file a claim on your insurance policy after an at-fault incident, then your insurance company will most likely begin the subrogation process. Subrogation is when your insurance policy recovers money – including your deductible – from the at-fault driver’s insurance company.
In rare situations where your insurance company does not begin the subrogation process, then you may wish to approach the other driver or insurance company to recover your deductible. However, in most situations, this is not necessary.