When Do I Have to Pay My Deductible?

After a car accident, the last thing you want to think about is paying more money out of your own pocket. But then you hear the word from your insurance company: “deductible.” It’s a term we all know from our insurance policies, but many people are unsure of when it actually applies. Do you have to pay it even if the accident wasn’t your fault? Where does the money go? And is there a way to get it back?

Understanding your deductible is key to managing your finances after a crash. A deductible is simply the pre-agreed amount of money you are responsible for paying for repairs to your own vehicle before your insurance coverage kicks in.¹ Think of it as your share of the repair cost.

Whether or not you have to pay it, and when, depends entirely on which insurance policy you use to get your car fixed. The choice you make determines your upfront costs.

Useful Information for You: In a Nutshell

• You Pay When Using Your OWN Collision Coverage: You are only required to pay a deductible when you file a “first-party claim” under your own collision insurance to repair your vehicle.
• You Do NOT Pay When Using the OTHER Driver’s Insurance: If the other driver was at fault and you file a “third-party claim” directly with their insurance, you do not pay a deductible.²
  
   
• Payment is Made to the Body Shop: The deductible is your contribution to the repair bill. You typically pay it directly to the auto body shop when you pick up your repaired car.³
  
   
• You Can Get It Back (Through Subrogation): If you use your own coverage for an accident that wasn’t your fault, your insurance company will try to recover all costs—including your deductible—from the at-fault driver’s insurer.⁴ If successful, they will refund your deductible to you.
  
   

Scenario 1: You Use Your Own Collision Coverage (Deductible Applies)

This is the most common scenario where you will have to pay your deductible. You might choose to use your own collision coverage because:

• Fault is being disputed.
• The other driver was uninsured or fled the scene (hit-and-run).
• You were at fault for the accident.
• You simply want your car repaired faster than the other driver’s insurer is moving.

How it works:

Let’s say your car has $5,000 in damage and your collision deductible is $500.

1. Your insurance company will pay the body shop $4,500.
2. You are responsible for paying the remaining $500 directly to the body shop when the repairs are complete.

Scenario 2: You File a Claim with the At-Fault Driver’s Insurance (No Deductible)

If the other driver is clearly 100% at fault for the accident and their insurance company has accepted liability, you can file a claim directly with their carrier.

How it works:

In this case, their “Property Damage Liability” coverage pays for your repairs. Because you are not their policyholder, their deductible does not apply to you. Their insurance is responsible for 100% of the reasonable cost of repairs, and you should not have to pay anything out-of-pocket.5 This is often the ideal path, but it can be slower as it depends on the other insurer completing their investigation.

The Key to Getting Your Money Back: Subrogation

What happens if the accident wasn’t your fault, but you use your own collision coverage to get your car fixed quickly? Does that mean you’re stuck paying your deductible for someone else’s mistake? No.

This is where subrogation comes in. Subrogation is the process where your insurance company, after paying your claim, steps into your shoes and legally pursues the at-fault party’s insurance company to get reimbursed for all the money they paid out.⁶ This includes the money they paid for repairs AND the $500 (or other amount) deductible you paid.

If their subrogation effort is successful, your insurance company will issue you a check, refunding your deductible in full. This process can take several months, but it ensures you are ultimately made whole.

Understanding when and why you have to pay your deductible helps you make informed decisions during the claims process. It allows you to weigh the speed and convenience of using your own coverage against the no-cost (but potentially slower) option of going through the other party’s insurance.

If you are in a dispute with an insurance company over your property damage, your deductible, or the subrogation process in the Tacoma area, an experienced attorney can help. Search the Car Accident Lawyer Directory Tacoma to find a trusted local professional who can protect your rights and ensure you don’t pay a penny more than you have to.

References

• Washington State Office of the Insurance Commissioner (OIC) – Collision coverage and deductibles:

  Official guidance for Washington consumers that explains what collision coverage is, how deductibles work, and your rights in the repair process.

  https://www.insurance.wa.gov/what-collision-coverage-and-when-do-you-need-it

• Insurance Information Institute (III) – Understanding your insurance deductibles:

  A national resource that provides a clear, consumer-friendly explanation of auto insurance deductibles and how they apply to a claim.

  https://www.iii.org/article/understanding-your-insurance-deductibles