Your deductible is the amount you agreed to pay out of pocket whenever you file a claim. Deductibles are there so that both the policy owner, you, and the insurance company, such as aha insurance, share in the responsibility of a claim. Deductibles also help prevent policyholders from incurring higher insurance rates by deterring them from filing more frequently. While that seems simple enough, there are a few things about your deductible that you should know before you have to file a claim. When do you pay your auto insurance deductible after a car accident? Do you have to pay if you’re not at fault? Do you need a police report to file an insurance claim? What happens if you can’t pay for it? Here we answer all of this and more.
When To Pay Your Deductible After a Car Accident: Frequently Asked Questions
Do you have to pay for deductibles right away?
Any time you submit a claim on your car insurance, you must pay your car insurance deductible as long as the damage is covered and equals more than your deductible amount. Once your claim is approved, you must pay your deductible before your insurer covers the rest.
Depending on your insurance company, some may require you to pay them upfront, while others may subtract the amount from your insurance payout. For example, if your insurance company approves your claim for $3,500 and your deductible is $500, you would only receive $3,000. Speak with your insurance provider to determine which deductible method they use.
When do you pay your auto insurance deductible after a car accident, and do you have to pay your deductible if you’re not at fault?
When a driver is not a fault in an accident, they would only need to pay the deductible if they submitted a claim to their insurance company. As most drivers have auto insurance, if you are not at fault, the at-fault driver would be responsible for covering the cost of your repairs and medical bills with their own insurance policy.
However, there are times when you may still need to pay your deductible even if you are not at fault. These include the following:
● If the at-fault diver is underinsured.
● If the at-fault driver is not insured.
● If the fault is undetermined.
If your accident falls under any of the above, you will likely need to file a claim and, thus, pay your deductible.
Another exception will be if you have what’s known as a disappearing deductible. It reduces your deductible by 20% for each consecutive year you do not file a claim. This coverage is optional and used to reward drivers. After five accident and ticket-free years, in theory, your deductible could be $0. However, only select insurance companies offer this, so talk to your provider.
Furthermore, suppose you cause an accident but do not cause damage to your vehicle. In that case, you won’t need to pay a deductible because your liability insurance would cover the other driver’s injuries and repairs. Liability coverage does not come with a deductible.
Do you need a police report to file an insurance claim before you pay the deductible for a car accident?
Nope. Did you know that in Ontario, if the damages from the accident equal less than $2,000 between both vehicles, you are not required to report it to the police? So, for example, if you were to get into a fender bender that caused $1,000 in damages, you can still file an insurance claim to repair your vehicle without reporting the accident to the police.
Be that as it may, you may still want to file a report to have a record of it, even if you are not planning to file an insurance claim. Despite what many people believe, your insurance will not be impacted in any way by filing a police report.
On the other hand, some exceptions do require you to file a police report, even if the damage is under $2,000. These include the following:
● If someone involved in the accident is injured.
● If the accident involves a government vehicle.
● If the collision is a result of a criminal act, such as DUI, impairment, etc.
● If the accident causes damage to private or municipal property.
● If one of the drivers does not have car insurance.
● If the accident involved a pedestrian.
Make sure you file the report within 24 hours.
What happens if you do not report the accident at all?
To avoid an increase in their car insurance, many drivers will often avoid reporting an accident. But there are many risks when it comes to not reporting even a minor accident like a fender bender. You may have made a verbal agreement with the other involved driver, but that does not mean they won’t change their mind about reporting it.
Should the other driver report the accident to their insurance company, they would notify your insurance company, which could risk them cancelling your coverage. And if the other driver decides to report the accident to the police, you could find yourself charged with failing to report an accident. Or worse, charged with failing to remain at the scene of an accident, which can result in jail time!
Plus, there is always a risk that the damage was significantly more than $2,000, so you legally have to file a report.
Who pays the deductible in a car accident in Ontario?
You do. Remember, your deductible is the amount you agreed to pay out of pocket whenever you file a claim. Therefore, if you submit a claim with your insurance company, you are responsible for paying the insurance deductible before your insurance company will cover the rest.
The following are examples of insurance claims where you would pay a deductible:
Theft or act of vandalism
If your vehicle is stolen or vandalized, your insurance will cover the repairs or replacement under the comprehensive portion after you have paid your deductible.
An accident where you are partially at-fault
If you were in a collision that your insurance company determined you were partially responsible for, you would be required to pay a portion of your deductible. The amount will depend on how much at fault you are. For example, if you were found to be 50% responsible, you would be required to pay 50% of the deductible.
An accident where you are fully at-fault
If your insurance company determines that you were 100% at fault for the accident, you will be required to pay the full amount of your deductible.
A hit-and-run accident
Hit-and-runs are awful for drivers. If you did not opt for collision coverage as part of your car insurance, you would be responsible for paying out-of-pocket for any damages to your vehicle. On the other hand, if you can identify who hit you, you will then be covered under the direct compensation portion of your policy — as long the driver who ran has car insurance.
How long does an insurance company have to investigate a claim?
Unfortunately, there is no set time limit, as every claim is different. It can take anywhere from a few days to several months. The more complex the accident was, the longer the claim would take to investigate and process.
Here’s a rundown of what happens after you file your claim:
Once you have submitted your claim within seven days of the accident, you will be assigned a claims adjuster. Their job is to determine how much your insurer will cover and then help you through the process. Generally, you can expect them to:
● Request a copy of the police report
● Take witness statements
● Visit the location of the accident
● Take photos of your vehicle and assess the damage
● Check your medical records (if you were injured) and inquire about expenses
● Request to speak to the other involved parties
Your insurance company will then need to determine who was at fault using diagrams that demonstrate over 40 different collision scenarios. The fault will be determined based on which scenario best matches your accident.
If you are found at or partially at fault, your insurance provider will then determine how much they have to pay out based on your car insurance. If you are found to be not at fault, your insurer will then contact the other driver’s insurance company to have them cover any medical bills and repairs.
What happens if you can’t pay for the car deductible?
Most insurance companies require you to pay your deductible before you receive your payout. This means that if you cannot afford your deductible, you risk having your claim denied and your car withheld by the mechanic. You may be forced to pay your repairs or medical bills on your own. Therefore, when considering when you pay your auto insurance deductible after a car accident, you should always choose an amount for your deductible that you can afford to pay out-of-pocket at any given point or ask if the insurer offers a payment plan before you make any agreements.
Is it illegal not to give insurance details after an accident?
According to section 200 of the Highway Traffic Act, any person involved in an accident must provide their insurance details when requested. These include your name, address, driver’s licence, insurance policy number and insurer, and ownership information. Not only do you have to provide this to anyone else involved in the accident, but also to the police and any witnesses of the collision.
If you refuse to share your insurance details, you could face a fine between $400 and $2,000. You could also have your license or permit suspended for up to two years. And depending on the severity of the accident, you could face up to six months in prison.
What should you do after an accident?
1. First things first, stop. If you leave the scene, it’s considered a hit-and-run, which is a criminal offence.
2. Check on your passengers and see if anyone is injured. Do not move anyone who is injured — call 911 and wait for help.
3. If you are uninjured and it is safe to do so, turn on your hazard lights, get out of your vehicle and document the accident with pictures and video.
4. After taking thorough footage of the accident, move your vehicle off the road. If you are unable to move your car, let other drivers on the road know your vehicle has broken down as best as you can by:
a. Keeping your hazards on.
b. Popping your hood.
c. Setting up flares or traffic cones.
d. Attaching safety flags.
5. Call the police to report the collision if:
a. The damage appears to be over $2,000.
b. You want to keep a record of the accident.
c. You suspect the other driver is impaired.
6. Call your insurance company (within 24 hours).