D. Gilson is a writer and author of essays, poetry, and scholarship that explore the relationship between popular culture, literature, sexuality, and memoir. His latest book is Jesus Freak, with Will Stockton, part of Bloomsbury’s 33 1/3 Series. His other books include I Will Say This Exactly One Time and Crush. His first chapbook, Catch & Release, won the 2012 Robin Becker Prize from Seve...

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Jeffrey Johnson is a legal writer with a focus on personal injury. He has worked on personal injury and sovereign immunity litigation in addition to experience in family, estate, and criminal law. He earned a J.D. from the University of Baltimore and has worked in legal offices and non-profits in Maryland, Texas, and North Carolina. He has also earned an MFA in screenwriting from Chapman Univer...

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Reviewed by Jeffrey Johnson
Insurance Lawyer

UPDATED: Jul 19, 2021

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What Happens if You Can’t Pay Your Car Insurance Deductible?

Each year, more Americans are choosing higher deductible amounts for their insurance coverage. They want to lower their annual insurance premiums, and it seems like an easy solution. When you have the cash in a savings account or room on a credit card, you might be able to stomach such an amount if it means getting your car back on the road. But what happens if you can’t pay your car insurance deductible?

For a variety of reasons, a higher deductible means lower auto insurance rates and cheaper monthly premiums. With most insurers offering deductible amounts of $1,000, $2,500, and even higher amounts, more and more consumers are choosing to risk paying a hefty sum out of pocket in the event of a claim.

If you cannot pay the full deductible up front after an accident, some repair shops may work with you on a payment plan. If you cannot pay the whole deductible, some shops may not start the repairs right away. Depending on your policy, your insurance company could also refuse to pay until you have paid your portion.

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What are some options to make ends meet if you can’t afford your car insurance deductible?

If you decide to raise your deductible to save money on your annual premium, it’s best to put the money you save aside just in case. If you haven’t done so, you may need to figure out how to pay your deductible up front after an accident. Following are a handful of strategies to help you make ends meet and get your car back on the road after a serious accident.

  • Don’t Fix Everything: This is the simplest and most effective solution to getting your car back on the road without paying your deductible. Your insurance company is required to issue payment for the full amount of the repair, but your insurance provider doesn’t choose where you get them done. You still get to choose how that money is spent, and what does and does not get fixed. Your repair shop can advise you on what are essential repairs and what can be skipped. In most collision repair jobs, there is a combination of necessary functional or mechanical repairs, and optional cosmetic repairs. Ask the shop what can be ignored, what’s necessary, and what can be repaired to a “functional but not beautiful” standard. This might mean driving around with a mismatched fender or bumper, but it’s better than no repair at all. In some cases, insurance companies will issue credits towards your deductible if you choose to keep things like a bumper with minor associated scratches or dents.
  • Maximize the Claim Payment: Work with your chosen body shop to have them do some basic disassembly to find and document all accident-related damage. Then make sure your insurance adjuster inspects it after the body shop does so. This will cause your insurer to issue additional payment for everything that is found. Often this can significantly increase the amount of the repair estimate, and the insurer’s payment. You’re still free to choose what the shop does and does not fix, though you may have to pay the shop a small fee for their “diagnosis” time if they’re not fixing everything.
  • Go Without A Rental: Some insurers will offer “cash out” options for rental coverage, instead of paying directly for a rental car. If you have rental coverage and you can go without your car for a few days or weeks, ask your insurer to reimburse you for your rental. Your insurance rate could also be a little lower without rental coverage. But you can try to negotiate after an accident.
  • Use Aftermarket or Refurbished Parts: Ask your repair shop about aftermarket, used, and refurbished parts. This is a minor cost-saving measure in the scheme of things, but a hundred or two hundred dollars here and there can make a difference. Keep in mind, this does not change your collision deductible or insurance premium.

Should you shop around for repairs?

If your car is still safe and legal to drive after the accident, take your time planning which shop to take your car to. Get multiple estimates from different shops, and ask each one what they can do to keep your repairs within a budget. Your claims adjuster will inspect your car to give an estimate of damages. Depending on your auto insurance policy, you may have flexibility to find the right repair sop.

If your car is NOT safe to drive or isn’t legal to be on the road due to damage and is being towed from the scene, demand the tow truck to bring your car to your residence instead of a repair shop.

If you don’t tell them what to do, most tow truck drivers will bring the vehicle to a shop of their choice, because they get a kickback or extra business from the shop.

Most insurance companies will pay the extra $100 or $200 for an additional tow from your residence to your chosen shop at a later date. Even if they refuse, an extra $100 or $200 for the additional towing might mean getting friendly service from a shop you can trust (and saving hundreds or thousands of dollars in repair costs), or difficult service from a shop that leaves you with few options and keeps your car until you pay every penny.

When the car is parked at your residence, take numerous photos of the damage and email them to various shops to get quotes.  They will likely need your car’s Vehicle Identification Number, which can be found on any official vehicle registration document and on the vehicle itself. If you already have a preferred shop for collision coverages, you can also have your car towed there. Keep in mind, some insurance companies offer more if you go to one of their preferred mechanics.

Should you use a payment plan?

Some shops will offer payment plans for customers. If you present yourself as reliable, professional, and straightforward, most shops will be willing to work with you to get your car repaired now.

While it may hurt your credit score, opening up a new credit card may be one of your only options if all else fails. You might also be able to get a limit increase on a current credit card if you call and speak with your creditor. This should be a last-resort option after all other options are exhausted, but for some the ability to drive to work is a necessity to make ends meet.

“Title loans” are an option and most likely a last resort for this circumstance. Be careful, as most title loan services will charge outrageous insurance premiums and some can be “loan sharks.” So be sure to read any contract you may have before signing up for a title loan, and use this only as an absolute last resort if all else fails. Most financial professionals would recommend avoiding this route altogether.

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What Kind of Plan Should You Make for A Higher Deductible?

Plan ahead if you want to raise your deductible to save money. The idea for insurance companies is you pay for more small claims within that deductible, and they pay that much less on larger claims. So examine your budget ahead of time and ask yourself, “Can I really afford to pay my deductible out of pocket right now?”

If the answer is clearly no, you should lower your auto insurance deductible in exchange for slightly higher monthly coverages rates on your actual insurance policy.

If you know you’re not going to be able to meet your deductibles on your auto insurance policies, don’t contract to have repairs done that include the deductible in addition to payouts from your insurer. You may find yourself without transportation after the repairs are done.

Most states allow shops to retain possession of a car using a mechanic’s lien on the unpaid bill. The shop can legally keep your car until they’re paid. This could put you in a pinch even if you have rental coverage if you can’t get your car back.

If you feel you may be paying too much, you can compare rates here with our free tool. Enter your ZIP code below to get started. Then answer a few questions and get quotes on options near you.