When you take your car out on the road, the probability of an accident always remains. Generally, when you are not at fault, the driver who caused the accident is liable to compensate for your losses. But if you were involved in an accident with an uninsured driver, you will be left with a wrecked car and the responsibility to repair it yourself.
You can opt for collision coverage to crawl out of such an unfortunate scenario. But it requires you to pay a deductible for the policy to kick in. However, there is a way via which you could opt for collision coverage without paying a deductible. This is known as a collision deductible waiver. And today we will discuss what exactly it is and if it is the right choice for you.
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What Is a Deductible?
Before we speak about collision deductible waiver, it is important to understand what a deductible is. Simply put, a deductible is that part of the damage repair cost that you agree to pay before the collision coverage kicks in.
For example, if your car repair costs about $4000 and your deductible is $1000, then you will need to pay that $1000 first if you want your insurance provider to cover up the remaining $3000.
People opt for a deductible because when you agree to pay a part of the bill, the risk taken by the insurance company reduces. And when the overall risk they are taking with you reduces, they offer you cheaper policies.
What Is Collision Deductible Waiver
Collision deductible waiver is a special add-on under which you will qualify to raise a claim under your collision policy without paying a deductible.
In this case, when your car gets hit by a careless driver, you do not have to worry about paying an upfront amount to your company to make them compensate for your losses.
When Will A Collision Deductible Waiver Not Be Applicable
Collision deductible waiver comes at an additional cost. So, before you plan to buy the add-on, it is important to understand the scenarios under which it will be helpful and situations in which it cannot help.
Here is a list of situations in which a collision deductible waiver do not apply:
1. If It’s A Single Car Accident
If you already have collision coverage, you will know that this type of coverage covers only two types of accidents:
- When the car crashes with another card on the road
- When the car bumps into a tree, pole, or similar objects without the involvement of another driver.
If your car is hit by another car on the road, then the collision deductible waiver will come in handy. But if your car bumped into a wall or tree then the collision deductible waiver will not be applicable. You will have to pay the pre-decided deductible before for the insurance provider to pay the rest.
2. The Accident Is A Hit And Run Case
Note that this rule varies from state to state. However, in most states, a collision deductible waiver does not apply to a hit-and-run case. This is because the driver might try to fabricate their single-car accidents into a hit-and-run case to avoid paying the deductible.
This is a very common scam pulled by customers and the insurance companies are well aware of that. Hence, to prevent frauds like these, you are in no luck if the driver drives away after hitting your car.
3. When No One Is At Fault
Collision deductible waiver generally only kicks in when the accident was the other driver’s fault. But there are certain cases when neither of the drivers was at fault. The accident could have happened due to natural hindrances like a heavy downpour or maybe a sudden animal attack. When no one is at fault in a situation like this, your insurance provider is not liable to activate your collision deductible waiver.
4. When You Were Partly Or Completely At Fault For The Accident
This is pretty self-explanatory. If you had even the slightest involvement in causing the accident, you will not be given the benefit of a collision deductible waiver. It might sound unfair because you are paying extra for it but that’s how it works. In case you are at fault, you have to first pay the deductible to claim the coverage.
The reason is that when you are exempted from paying the deductible, the compensation your insurance provider has to pay increases. So when you are at fault, they make sure you pay a part of the repair cost.
Is Collision Deductible Waiver Worth It?
The one question that will haunt you is if the collision deductible waiver is worth it. The answer to this depends on your driving expertise and your requirements.
To help you decide, here is a list of all the advantages and disadvantages of getting a collision deductible waiver
- It gives you peace of mind that you will not have to pay the deductible to get compensation for your losses no matter who hits your car.
- The add-on is pretty cheap and you get to save money on your car repair.
- When you reduce your deductible, your premium prices go up.
- It’s not applicable when you are at fault and the other scenarios as mentioned above.
In a nutshell, a collision deductible waiver has its own advantages and disadvantages. So, if you value your peace of mind and do not want the trouble of paying an upfront amount after an accident then this add-on is for you.
However, if you do not get into accidents frequently, or your annual charges for the add-on turns out to be greater than the deductible then getting the add-on is not a good idea.
The exact cost and the terms and conditions governing your collision deductible waiver depend on your state. But one thing that remains constant is finding a reputable insurance provider.
*Photo by Tobi