Can I pay my car insurance deductible in payments?
7 minute read Published on Aug 3, 2025 by BrokerLink Communications
You've been in a car accident and you've rear-ended someone. The front of your car is all smashed up. It's time to file a claim through your collision coverage and make sure you have all the details ready. But, suddenly, you realize that you're facing a $1,000 deductible that you can't immediately afford. Now what?
If you're in this situation, you may be wondering, "Can I pay my car insurance deductible in payments?" The short answer is: it depends. Keep reading to learn who offers payment plans for car insurance deductibles and alternative payment options when payment plans aren't available.
What is a car insurance deductible?
When you buy car insurance, you’re not just picking the types of coverage you want—you might also need to choose a deductible, depending on your policy, and where the deductible applies. Your deductible is the total cost you agree to pay out of pocket if you ever need to file a claim. They typically range from $250 to $2,000, with the most common amounts being $500 or $1,000.
Think of your car insurance deductible as your share of the costs before your insurance company steps in to cover the rest (up to your insurance policy limit). It’s called a deductible because it’s the portion deducted from your total payout when you make a claim for any insured loss.
How does a car insurance deductible work?
Imagine you’re in an at-fault accident, but luckily, you have collision coverage. If the repair costs are much higher than your deductible, consider also any additional coverages you may have. It usually makes sense to file a claim with your insurance company.
Let's say the damage estimates are $8,000, and your collision coverage deductible is $1,000. In this case, you’d only need to pay your deductible amount from the total amount, while your insurance covers the remaining $7,000. In comparison, your insurance would cover the remaining $7,000, or up to your policy’s limit.
However, not every situation calls for filing a claim. For example, if the damage from an accident is only $500 but your deductible is $1,000, you’d actually save money by paying for the repairs yourself. Since your deductible is higher than the repair cost, filing a claim wouldn’t help, especially for drivers who are unaware of their deductible, as you’d be responsible for the full amount anyway.
What types of coverage require deductibles?
When you add extra coverage to your car insurance policy, you’ll usually need to choose a deductible for each type. These types of coverage include:
With collision coverage, how much you pay depends on whether you're at fault for the accident. If you're fully responsible, you'll need to cover the entire deductible, just like homeowners would with property damage. But if you're only 50% at fault, you'll only have to pay half. As for comprehensive coverage, you'll always pay the full deductible amount.
Additionally, depending on your location in Canada, you may also have a deductible (or at least the option for one) on certain mandatory coverages, such as uninsured automobile coverage or direct compensation-property damage coverage.
How do insurance deductibles affect premiums?
Insurance companies use deductibles to balance the financial risk of covering drivers. A higher deductible means you take on more financial responsibility, which usually means lower monthly premiums. On the other hand, if you choose a low deductible, you’ll likely pay more for your policy. That’s because when out-of-pocket costs are lower, policyholders are more likely to file smaller claims.
Can you pay a deductible in payments?
Whether or not you can pay your deductible in payments depends on your insurance company. Some insurance companies in Canada offer deductible payment plans to make it easier for policyholders to handle out-of-pocket costs after a claim.
For example, in Saskatchewan, the Saskatchewan Government Insurance (SGI) provides a Deductible Payment Plan that allows customers to pay their deductible over a 10-month period, regardless of how the vehicle was damaged, be it collision, vandalism, hail, or theft.
However, while most insurers don't have a formal program for this, some may be willing to work out a payment arrangement on a case-by-case basis. If covering your deductible is a challenge, it’s always worth reaching out to your insurance provider to see what options might be available.
Alternative options to paying your deductible in full
If your insurance company requires your full deductible amount upfront without an option for payment plans, you may need to look into other options if you find yourself struggling to come up with the amount. Fortunately, there are a few options available, from payment plans through auto repair shops to personal loans and more. Below, we will explore various alternative options for paying your deductibles:
Repair shop payment plans
Various auto repair shops in Canada offer payment plans to help customers cover their insurance deductibles, knowing that paying the full amount upfront isn’t always easy.
For example, CARSTAR, a network of collision repair centers, offers flexible financing options through the Driven Brands Credit Card or EasyPay Finance at select locations. These plans can be used not just for deductibles, but also for customer-paid repairs or fixing pre-existing damage.
If you’re worried about covering your deductible, it’s worth asking your repair shop about payment options. Just keep in mind that availability and terms can vary depending on the shop and location.
Personal loan or credit card
If a payment plan isn’t available, you could consider using a personal loan or credit card. Many banks and credit unions offer small personal loans, which can be an affordable way to cover a deductible, especially if the interest rate is lower than a credit card’s.
If you have a credit card with a low interest rate or an introductory 0% APR offer, it could be a viable short-term solution. Just make sure you have a plan to pay it off quickly to avoid high-interest charges.
Friend of family member
If other options aren’t working, consider reaching out to a trusted friend or family member for help. They might be willing to lend you the money or help cover the deductible in exchange for a repayment plan that works for both of you. Borrowing from someone you trust can be a more flexible and interest-free option compared to loans or credit cards.
What happens if I can't pay my deductible?
Many insurance companies require you to pay your deductible before they cover the rest of the claim, which means you’ll need to come up with the money upfront. So, if you can’t afford your deductible, getting your car repaired could be delayed. However, this can lead to further complications. For example, if your car is unsafe to drive, delaying repairs could put you at risk or result in additional damage if you continue to drive your car, which might not be covered by insurance later. Also, if you delay repairs for too long, your insurer may close the claim, which could affect your ability to get reimbursed later.
On the other hand, if you're required to pay the deductible to the repair shop, and your car is already in the shop, while the insurance company may have already sent the shop a cheque for the repairs minus your deductible, the repair facility may refuse to release your vehicle until you've paid it.
It's also possible that you'll face higher premiums in the future. If your insurance company notices that you’re struggling to pay your deductible, they could see you as a higher-risk customer. That might lead to higher rates when it’s time to renew your policy. If you’re in a tough financial spot, reach out to your insurance company and repair shop to see if they have options to help you work through it.
How to choose the right deductible for your budget
Picking the right deductible for your budget comes down to balancing cost and risk. Here are three key things to consider:
Your financial situation
Take a look at your savings. Could you comfortably cover a higher deductible if you had to file a claim? If so, choosing a higher deductible can lower your monthly insurance costs. But if paying a large sum out of pocket would be tough, a lower deductible might be a better option, even if it means slightly higher premiums.
Your driving habits
Do you frequently file insurance claims? If so, a low deductible could save you money in the long run since you won’t have to pay as much out of pocket each time you file. But keep in mind, frequent claims and lower deductibles usually mean higher premiums.
On the other hand, if you have a clean driving record and rarely make claims, a higher deductible might be the way to go. You’ll pay less for insurance each month, and since you’re less likely to need a claim, the higher deductible may never even come into play, helping you save money overall.
Your car’s value
If you drive an older car that’s not worth much, it might not make sense to have a high deductible. You don’t want to end up paying more in repairs than your car is worth. In that case, a lower deductible might be the smarter choice, keeping your upfront costs lower if you need to make a claim.
Learn more about car insurance from BrokerLink
Car insurance deductibles can be a bit tricky, and it's important to pick an amount that you can afford should you ever need to file a claim. That’s where BrokerLink comes in. If you’re still unsure about how deductibles work or if you're wondering whether your insurance company offers payment options, we’re here to help.
Reach out to BrokerLink today, and one of our licensed insurance advisors will be happy to answer your questions and guide you toward the best option for your needs. You can reach us by phone, email, or in person at any one of our locations throughout Canada.