What Happens If You Can’t Afford Your Deductible?

I can't afford my car insurance deductible - now what? Unfortunately, you need to pay your deductible before your auto insurance claim payment will go through. If you can't afford your auto insurance deductible, a mechanic can legally keep your vehicle until you pay your debt and they can make their repairs. It's important to shop around for auto insurance quotes online so you can find coverage with a deductible you can afford. Enter your ZIP code to start comparing auto insurance rates now.

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Rachel Bodine graduated from college with a BA in English. She has since worked as a Feature Writer in the insurance industry and gained a deep knowledge of state and countrywide insurance laws and rates. Her research and writing focus on helping readers understand their insurance coverage and how to find savings. Her expert advice on insurance has been featured on sites like PhotoEnforced, All...

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Written by Rachel Bodine
Insurance Feature Writer Rachel Bodine

Leslie Kasperowicz holds a BA in Social Sciences from the University of Winnipeg. She spent several years as a Farmers Insurance CSR, gaining a solid understanding of insurance products including home, life, auto, and commercial and working directly with insurance customers to understand their needs. She has since used that knowledge in her more than ten years as a writer, largely in the insurance...

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Reviewed by Leslie Kasperowicz
Farmers CSR for 4 Years Leslie Kasperowicz

UPDATED: Jun 6, 2022

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Car insurance deductibles can be expensive. You might make a valid claim on your car insurance, only to discover that you need to pay a $500 or $1,000 deductible to your insurance company before the claim can be complete.

What happens if you can’t afford to pay your car insurance deductible? Today, we’re explaining everything you need to know about this situation.

You Need to Pay your Deductible for your Claim to Be Complete

First, let’s make something clear. In order for your car insurance claim payment to go through, you need to pay your deductible. Until you pay your deductible, you will not receive money from your insurance company.

If you cannot afford to pay your deductible today, then you need to find the money to pay that deductible. Or, you can avoid making an insurance claim entirely.

Your car might be driveable after an accident. In that case, you might not need to report the incident to your insurance company right away. If the accident only caused minor exterior damage, for example, and the car is still safe to drive, then you might want to save up for your deductible payment before making the claim.

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Not All Car Insurance Policies Require Upfront Deductible Payments

Keep in mind that some car insurance policies will simply subtract the deductible from your claim.

If your car was totalled and the value of the vehicle was assessed at $16,000, for example, and you have a $500 deductible, then you might receive a payment from your car insurance company for $15,500. It’s the actual cash value of your vehicle minus the cost of your deductible. In this case, you do not pay the deductible upfront – it’s simply subtracted from your claim.

On other car insurance policies, you need to pay the deductible out of pocket directly to the mechanic or car insurance company. Once you have paid the deductible, then the car insurance company will take over.

Read the terms of your car insurance policy to make sure you understand your deductible.

Can I Avoid Paying My Deductible?

There are limited situations where you can avoid paying your deductible. The only real way to avoid paying your deductible is to setup a side deal with the mechanic in charge of fixing your vehicle.

Let’s say the mechanic and car insurance company require a $500 deductible before completing repairs on your vehicle. You can speak with the mechanic to arrange a deal. Some mechanics may be willing to arrange financing, for example, allowing you to pay your deductible in smaller monthly installments.

In rare cases, a mechanic may even be willing to waive a deductible completely. This is uncommon, but it never hurts to ask. Sometimes, the mechanic is making so much money off of the vehicle repairs that the mechanic might be able to reasonably waive the deductible.

In both of these situations, the mechanic would bill the car insurance company for an amount minus the deductible and then allow you to make payments for the balance of the bill (or wipe out your deductible completely).

Mechanics Can Legally Keep your Vehicle Until the Debt is Paid

If you avoid paying your deductible or avoid re-paying the mechanic for covering your deductible, then the mechanic can legally keep your vehicle.

It’s important to note that it’s not illegal to ask the mechanic to waive the deductible. This is an accepted practice

It is illegal, however, to concoct an insurance fraud scheme with the mechanic. If the mechanic plans to overcharge the insurance company in order to recoup the cost of the deductible, for example, then this is considered illegal insurance fraud. The mechanic is also forbidden from using after-market parts and then charging the insurance company for company direct parts or engaging in other practices that would falsely inflate costs for your insurance company.

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Get a Loan

If you can’t afford to pay your deductible, then there are other options. Sell some of your possessions. Get a payday loan; some states allow for you to get a payday loan from a different state. Wait a few weeks and save up enough money to pay for your car insurance deductible.

If your car insurance company requires you to pay your deductible upfront, then you will need to pay your deductible before your car insurance repairs can be completed.

Conclusion: Consider Adjusting your Monthly Premiums to Lower your Deductible

Whether you’re dealing with health insurance or car insurance, you can typically adjust your deductible to any amount you like. Ideally, your deductible will be an amount you can easily afford out-of-pocket when something unexpected occurs. If you can’t afford to pay a $1,000 deductible, then you need to adjust your premiums. You will pay slightly higher premiums. But, if something unexpected occurs, you will only pay a $500 or $250 deductible.

Remember: if you can’t afford your deductible, then there’s really no point to having insurance. You need to pay your deductible in order for your claim to go through.

However, not all insurance companies require you to pay the deductible upfront. Check your policy to make sure you understand how your deductible works. If you can’t afford to pay your deductible, then you should adjust your deductible to be more manageable.

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