What You Need to Know

• Liability insurance covers the cost of damage related to the other vehicle
• Drivers only pay a deductible for collision and/or comprehensive insurance
• Common deductible amounts are $500 or $1,000

If your vehicle is damaged, you're required to pay your insurance deductible before your policy covers the cost of repairs. But do you pay a deductible if you hit a car?

Since liability insurance covers damage you cause to another vehicle, you will not pay a deductible if you hit a car. However, your insurance rates will likely go up. Increasing your deductible can help lower insurance rates.

Keep reading to learn how deductibles work, how to choose the right deductible, and how hitting a car can impact your insurance rates.

Do I pay a deductible if I hit a car?

Liability coverage does not require a deductible. However, it only covers the cost of repairs for the vehicle you hit.

Collision and comprehensive insurance are additional coverages that you can purchase to protect your vehicle. They require a deductible to be met before your insurance covers the cost of repairs to your car.

For example, let's say you're at fault for an accident that causes $4,000 worth of damage to your vehicle. If your deductible is $500, you will pay that, and your insurance company will cover the remaining $3,500. However, keep in mind that if the cost of repairs is more than the vehicle's value, your insurance company will pay you what your vehicle is worth instead of paying for repairs.

Depending on your deductible and repair costs, it might be more cost-effective to pay the cost of repairs out of pocket. For example, if the repair costs $350 and your deductible costs $500, it would save you money to pay the $350.

When You Pay Car Insurance Deductibles

When another driver hits you, you file a claim with their insurance company. However, this process can be lengthy and could leave you without a vehicle for weeks.

Filing a claim with your insurance company and paying a deductible can get you back into the driver's seat of your vehicle faster. Once the claim has been investigated, you can get reimbursed for the deductible you paid your insurance company if the other driver is found at fault.

Learning when to file a car insurance claim can help you get more affordable rates.

Choosing the Right Deductible

You want to choose your deductible based on what you can afford. Typically, collision and comprehensive insurance deductibles are $500 or $1,000. The deductible you choose impacts your premium. A higher deductible equals a lower monthly premium, and a lower deductible equals a higher monthly premium.

The average cost of collision insurance is close to $290 per year, while the average cost of comprehensive insurance is a little more than $134 per year. Therefore, drivers could pay close to $500 per year for these additional coverages.

You want to consider what you can afford monthly, but you also want to consider what you can afford if you are involved in an accident since insurance won't cover the cost of repairs until the deductible has been paid.

Insurance premiums are calculated using several factors, including:

• Age
• Gender
• Location
• Credit
• Vehicle usage
• Type of vehicle
• Type of coverage

Any accident that is your fault becomes part of your driving record. And since your driving record is used to calculate your premium, you will likely see a rate increase when you renew your policy. In addition, the accident can impact your premium for up to three years in many cases.

Drivers can always shop around and compare car insurance rates for a price that fits their budget.

The Bottom Line: Consider Collision and Comprehensive Coverage

While you don’t have to pay a deductible with liability coverage, it is not enough protection if your vehicle is damaged in an at-fault car accident.

Investing in collision and comprehensive coverage is beneficial because the added protection saves you money if your vehicle is damaged. However, ensure that you can afford the monthly premium and deductible. We found six ways to save money on car insurane to help drivers find affordable coverage and deductibles.

Frequently Asked Questions About Paying Deductibles

What should I do if there is no damage to the car I hit?

You should always report a car accident, even if there is no damage to the vehicles involved. Drivers may be concerned that their insurance premiums will increase if they do so, but the consequences of not reporting an accident can still cost them big.

Reporting the accident can help your insurance company investigate and determine fault. And if you hit a car and don't report it right away, your insurance company may not cover any expenses related to the claim.

Do car insurance rates increase after an accident?

Companies usually raise rates after an accident since the risk to insure you increases. Car accidents can stay on your record for three to five years, meaning you'll pay higher rates during that time.

When someone hits you do they pay the deductible?

The at-fault driver's insurance will cover your repairs and deductibles. If you paid a deductible, you might be refunded if the other driver is found to be at fault.

How can I avoid paying my car insurance deductible?

You can avoid paying a deductible if you don't file a claim. Many drivers will not file a claim if the damages do not exceed their deductible.

Is it better to have a $500 deductible or $1,000?

Picking an insurance deductible depends on how much you want to pay out-of-pocket for a claim. A $500 deductible will have higher insurance rates but cover more after an accident, while $1,000 costs less per month but requires you to pay more before insurance coverage applies.

What does a $500 deductible with full glass coverage mean?

If you have full glass coverage, you will not have to pay a deductible to repair or replace broken windshields or glass after a covered event. However, you still have to pay $500 toward other types of repairs.

Do insurance companies ever waive the deductible?

Insurance companies will often waive a deductible for glass repairs or hit-and-run accidents, but you should check with your insurer to be sure.

What happens if you don't have the money to pay your deductible?

Unfortunately, repairs will not start until you pay the deductible. Some repair shops can offer a payment plan, or you may be able to charge the deductible to a credit card.