The $500 deductible is standard for most auto insurance plans with a standard coverage car. But what does that mean, and what are the circumstances that would make this deductible amount not apply? We answer your questions about the $500 deductible below.
- What is a $500 deductible?
- What is the $500 deductible for?
- When does the $500 deductible not apply?
- How does the $500 deductible work in an accident?
- Is the $500 deductible the same for all car insurance companies?
- How Does $500 Deductible Automobile Insurance Cover Damage From an Accident?
What is a $500 deductible?
A $500 deductible is the amount of loss you must bear for any incident that results in damage to your vehicle. In my country, Canada, we use the KIJHL (Karma Insurance Loss Deduction), where a $500 dollar deductible means you pay $500 out of pocket for each claim filed on your policy (after a deductible has been met). This would make your deductible $500 and make you pay $500 for each claim filed (after a deductible has been met). The cost for the deductible is determined in your coverage plan’s policy. (You can check your coverage plan’s policy description, or add your policy on a website like CoverGod) Your deductible must be no higher than the minimum requirement for your plan.
What is the $500 deductible for?
The $500 deductible is the most affordable plan you can get for car insurance. This covers one accident. Your next claim would then start at the deductible, and you could still have to pay your deductible up front. For an insurance plan with a $500 deductible, you would need to keep your deductibles in a separate account and not touch it until you needed to. If you incur the deductible while driving, your policy would cover the cost of any accidents you had while driving without paying anything out of pocket. Why are car insurance deductibles so low? There are many reasons why your insurance deductibles are so cheap. You can read our article on Car Insurance Deductibles and find out why car insurance deductibles are so low.
When does the $500 deductible not apply?
In most cases, the $500 deductible will not apply when the car insurance policyholder does not take a defensive driving course from the state. For more information, click here: Does the $500 deductible apply for everyone who has a car insurance policy? The $500 deductible is specific to the coverage purchased. There is no such thing as “mandatory coverage” for all drivers. So the $500 deductible is required if your car insurance policy covers collision and comprehensive coverage. And when you purchase liability insurance (also known as the average claims deductible), you must pay for the $500 deductible before they will offer coverage. Is it always $500? Some insurance plans with collision and comprehensive coverage will offer lower deductibles.
How does the $500 deductible work in an accident?
First, what does the $500 deductible mean, and what are the circumstances that would make this deductible not apply? As with any other claim, the insurance company has to contact you with an estimate of what they think the cost of the damage is. What would usually be the case is that they’ll say “it looks like you’ve been rear-ended, and the damage is up to around $500” and will want to know who it was, who’s at fault, and who’s at fault in the car behind you (if anyone). If the car behind you had damage that’s mostly cosmetic and not significant (and we’ve seen this happen), the car insurance company may make the determination that the damage is mainly cosmetic and not recoverable.
Is the $500 deductible the same for all car insurance companies?
Most auto insurance companies state that the $500 deductible is the maximum amount a policyholder is required to pay before they are reimbursed. So in general, what it means is that if you paid a total of $500 for car insurance, the insurance company will reimburse you the $500 that was paid in full and will not have to pay the $200 deductible towards your car insurance as long as your car is being repaired. However, if the car is not in fact being repaired, you will have to pay the $200 deductible as you normally would. How to Find Out If I Have This Deductible Amount Your car insurance will most likely be broken down into smaller policies as the list of policies you are covered by will dictate what the different deductibles are.
How Does $500 Deductible Automobile Insurance Cover Damage From an Accident?
When the policy goes into effect, $500 is an amount that your insurance company will only cover if you’re at fault. If you don’t admit to being at fault, you’ll receive $500. If you do, you’ll receive an additional $500.