Who pays the deductible after a car accident?

It is helpful to know who pays the deductible after a car accident. There are different answers depending on your state and insurance company. In this article, we’ll answer these questions:

  • What is a car insurance deductible?
  • Who pays the deductible?
  • Does the auto repair shop collect the deductible after a car accident?
  • Do auto body shops offer a payment plan for deductibles?
  • Who pays the deductible after a car accident if the car is a total loss?

You can also find helpful resources visiting your state’s websites like the North Carolina Department of Insurance Auto Insurance FAQ page.


What is a car insurance deductible?

A car insurance deductible is the amount of money your policy says you’ll have to spend before insurance coverage kicks in. The amount of your deductible depends on the kind of policy you have and the amount you have agreed to pay.

Some car insurance policies do not have a deductible. For example, a liability policy might not have a deductible. A collision policy, however, may require you to pay an out-of-pocket amount of money before the insurance company will pay for a repair.

You should check with your auto insurance agent to find out which policies you have. Your agent will also be able to tell you what your deductible amounts are and when you’ll need to pay them.


Who pays the deductible?

The answer depends on state insurance laws and your policy terms. For example, if your vehicle is damaged:

  • by an insured driver and their insurance company accepts responsibility for the accident, you generally will not be responsible for a deductible payment.
  • in an accident where you are at fault and your policy includes a deductible, you’ll be responsible to pay the deductible amount.
  • by an uninsured driver and state law allows your insurer to bill you for a deductible amount, you’ll be responsible to pay the deductible amount.

Your agent can help you with the information you will need based on your specific policy and situation.


Does the auto repair shop collect the deductible after a car accident?

Photo of a calculator and paperwork to show who pays the deductible after a car accident repair.

When you work with a reputable auto body collision repair shop, they will help you understand how your insurance company will most likely handle your claim.

In select cases, the body repair shop may be able to work directly with your insurance company. In these cases, the shop will work with both you and your insurance company’s representative. Together, the shop and insurance company will make a preliminary estimate of repair costs. They’ll also work together, and with you, to make adjustments for hidden damage the shop discovers along the way.

In some cases, the insurance company will pay the collision repair shop directly for the amount of the parts, labor, and any towing or storage charges that are part of the claim. The amount they pay will be the total amount of the claim MINUS any deductible set in your policy. If your insurance company does not pay the shop, you will be responsible to pay the entire amount to the shop at the time you pick up your vehicle and work with your insurance company for reimbursement of the covered repairs.

When your claim includes a deductible, you’ll pay that amount to the shop when you pick up your car.

If the amount you are asked to pay is higher than your deductible amount, it may be for different reasons. If your insurance company has a “betterment” provision, it means you will pay the difference between the replacement cost and a pro-rated amount for the damaged part.

Tire replacement is an example of this kind of clause. If your damaged tire was 50% worn and is replaced with a new tire, a betterment policy will pay up to 50% of the price of a new replacement tire.

Another reason your payment amount might be higher than the deductible amount is if you chose to have the shop do things the insurance company did not approve. For example, if you chose to use OEM Replacement Parts as part of your repair but the insurance company only approved used parts, your total payment at the time of pick up will include both the deductible amount and the difference in parts price between salvage and new OEM parts.


Do auto body shops offer a payment plan for deductibles?

A collision repair shop will usually require payment in full for the deductible amount. Most shops do not offer payment plans or loans.


Who pays the deductible after a car accident if the car is a total loss?

When the cost of repair is higher than the total loss threshold (generally set by state law or the state department of insurance), they will “total” the car. That means they believe it is a total loss.

Depending on the terms of your policy, the insurance company will usually pay you the retail value of your vehicle MINUS the deductible amount. Most insurance companies will use a service like the Kelley Blue Book to determine the value of your car based on its condition before the accident. They will take the car in exchange for the total loss payment.

If you decide you want to keep the car, you can work directly with the insurance company to negotiate an insurance payout that works for both of you. We generally discourage customers from taking this option because of the challenges associated with vehicles that have a salvage title.


About Automotive Collision Specialists in Fuquay Varina, NC

Automotive Collision Specialists works with select insurance companies. In North Carolina, you have the right to choose any repair shop – not the one your insurance company or the other driver’s insurance want you to use.

If you’re trying to find a good body shop near you to help with a collision repair or restoration project, please give us a call. We’ve been a part of the Fuquay-Varina, NC community for more than 30 years. We’re ASE and I-CAR certified and offer a limited lifetime warranty on all the work we do. Call today to see how we can help!

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