Can I change my deductible after an accident?

8 minute read Published on Feb 22, 2024 by BrokerLink Communications

oung frustrated woman crouches next to wrecked car after a car accident

Car insurance is expensive, and choosing the right policy determines how a portion of your budget sheet will look. You can buy a car insurance policy with any company and change your coverage levels and deductibles. Whether you have too little or too much insurance coverage or don't enjoy the service you get, there's nothing wrong with changing your mind.

You should always choose what fits your needs, , after all, you are the one paying. Read our guide on changing your deductible after an accident and how it works.

Auto insurance deductibles - what you need to know

Before changing your vehicle insurance deductible, let's understand the definition of auto insurance deductibles. A deductible is what you pay out-of-pocket for any claims. Once you pay your deductible, the insurance company covers the remaining fees up to your coverage limits.

For example, let's say you have an auto insurance deductible of $1000 for collision coverage, and the total claim for the accident is $5000. The insurance provider pays $4000 for the car repairs after you pay your deductible. Your insurance provider only pays for damages that are above your deductible amount.

In the event that you begin the claims process with your insurer, you may not be able to adjust your deductible until after your claim has been completed. Meaning you are stuck at the deductible level you chose previously until the claim is resolved, or repairs have been completed.

Most insurance companies have car insurance deductibles for the coverages in your policy. Comprehensive car coverage and collision car coverage are two of the most common types of auto insurance with deductibles.

If your vehicle is written off due to a claim, you will receive a payout for the vehicle's value minus your deductible. If your vehicle is worth $10,000 and your deductible is $500, you will receive a payout in the amount of $9,500.

However, liability car insurance does not have a deductible. You can choose how much or how little you want for your deductible based on what makes you the most comfortable.

How to choose the right car insurance deductible for me

Many factors influence how much vehicle insurance deductible you choose. You can set the car insurance deductible that makes the most sense for your financial situation and risk tolerance.

Deductibles have an inverse relationship with insurance premiums. A higher deductible means a lower premium, and a lower deductible results in a higher premium.

If you want to pay more for car insurance or need more coverage from the insurance company, you can choose a lower deductible. You save money by paying less out-of-pocket, and the insurance company will pay more for an insurance claim.

You should also consider your location when choosing the deductibles you want. Location influences the cost of a deductible and your claims frequency. Drivers in high-traffic areas or higher accident volumes may choose to lower their auto insurance premiums with a higher deductible or want a lower deductible to pay less out-of-pocket for a claim. If you have a clean driving record and drive safely, you may choose a large deductible to save more money on premiums.

Is it better to pay out-of-pocket or use insurance?

When filing a claim with your provider, you must pay your deductible upfront. Assess the severity of the damage and loss from any accidents you want to report and determine what makes the most sense. You could pay out-of-pocket for cosmetic damages, claims that can be settled privately with relevant parties, and smaller fixes. It also allows you to delay going to the repair shop if you don't have the money to fix your vehicle right now. It is ideal to receive an estimate of the cost of the damages before deciding whether or not to opt for a private settlement.

Going through insurance means you pay your deductible before insurance kicks in, which may not always be in your favour. For example, if the claim is $1000 and your deductible is $2000, you must pay the total cost since it is below your deductible.

It can be worthwhile to opt to pay for things out of pocket in the event that the damage amount is close to your deductible. For example, suppose you need a replacement windshield, and your insurance deductible is $250, but a new windshield is $300. In that case, it may be cheaper, in the long run, to pay for the windshield out of pocket and avoid the potential for an increase in your insurance premiums.

Can you switch car insurance companies at any time?

Yes - you can switch vehicle insurance companies at any time. Most insurance policies are renewed yearly, and you make changes during renewal. However, you don't have to wait until the contract year finishes and can switch at the beginning or middle of your policy term. If you do this, there may be financial repercussions, as insurance is typically a one-year contract, which means cancelling the policy prior to the expiry allows the company to charge penalties to the policy owner.

What to consider before changing insurance companies

It's important to evaluate whether a switch in car insurance benefits you in the long term. Changing your provider soon after an accident can be a red flag and cause the insurer to look more closely into your driving record and risk factors. Changing insurance companies to get a new deductible amount could cost you more money.

Can insurance companies see my claims history?

Insurance companies see your claims and accident history within the last seven years and will likely raise questions if something seems suspicious. In some cases, the new vehicle insurance company may decline to provide you with insurance coverage.

Am I responsible for the deductible when the accident wasn't my fault?

Not always! You are responsible for paying the deductible if you file a claim with your insurer. Since most drivers have auto insurance, the driver at fault is responsible for paying any medical bills and repairs you need from their insurance policy. There are some scenarios where you may still pay a deductible even if you are not in an at-fault accident:

  • The at-fault driver is underinsured or not insured
  • The fault is undetermined for the accident
  • You are partially at fault
  • The other person does not have insurance
  • The damage was a result of vandalism or assault

Furthermore, if you are at fault or partially at fault for an accident, but there are no damages to your vehicle, your liability insurance coverage would cover the other person's injuries and repairs. Liability coverage has no deductibles.

What is a vanishing deductible?

Vanishing deductibles, or disappearing deductibles, reduce your deductible by a percentage for each consecutive year you don't file an insurance claim. It is optional and rewards drivers for being safe on the road.

Maintaining an excellent driving record with no accidents or tickets could, in theory, reduce your deductible to $0. Not every insurance company offers a vanishing deductible, but it is a great way to lower the cost of your insurance and help you save money in the event of a car accident.

How much will it cost to change insurance companies after a car accident?

If you get into a car accident and realize you don't like the claims process or service your insurer provides or simply want a different policy, that's okay. However, there are things to consider before you make the switch.

You may lose discounts or perks when switching insurance companies. You may have loyalty customer discounts, bundled insurance coverage discounts from your insurer, or a disappearing deductible. Most of the benefits you get take time to build up with your car insurance company.

There is no guarantee that other insurers will offer the same discounts or perks when you change providers. Be sure to calculate how much money you may save or lose in the long term with a new insurance company.

Your current insurer cannot legally raise insurance premiums mid-policy. If you are happy with your current premium, you may want to wait until the renewal period to start car insurance shopping again.

A new insurer will consider your most recent car accident claim and likely charge a higher premium than you have now. If that's not something you want, you may want to wait for now, and you can always change providers if your current insurer raises your rates at renewal.

Some insurance companies charge a fee if you cancel mid-policy. You should check with your current insurer to see if there are penalties for changing car insurance companies before the renewal period.

How long does an insurance company have to investigate a claim?

Generally, the insurer has 30 days to investigate after you file a claim. The investigation time frame can vary based on the complexity of the claim and whether they need to conduct a claims investigation.

For example, an accident with multiple collisions and serious injuries will take longer to investigate than small claims like a fender bender. It will also take longer to investigate a claim if the at-fault driver is undetermined.

Types of auto insurance deductibles

There are comprehensive coverage deductibles and collision coverage insurance deductibles. You always pay the full auto insurance deductible amount for comprehensive coverage. The car insurance deductible amount you pay for collision coverage depends on whether you are at fault for the accident.

  • You pay the deductible in full if you are 100% at fault.
  • You pay the deductible based on the percentage of fault you have in the accident. For example, you pay 20% if you are 20% responsible for the accident.*

*This may vary in different provinces and across different insurers.

Can you change car insurance during a claim?

Yes - you can change your car insurance at any time. However, you should purchase a new policy before cancelling your old one to avoid a lapse in coverage. Any open claims will not transfer to your new insurance.

Can you make payments on your deductible?

Some insurance companies offer a payment plan in monthly installments for your deductible. It is a great option if you don't have the money upfront to pay in full. Contact the insurer to learn if they have payment options.

How to get the most affordable vehicle insurance after a car accident

Here are some easy ways to get affordable vehicle insurance after a car accident:

How much is car insurance per month in Ontario?

The average monthly car premiums are between $125 to $458. Insurance rates vary depending on where you live in the province, your driving record, and your personal information.

Get affordable auto insurance from BrokerLink

BrokerLink offers affordable auto insurance with comprehensive coverage from many providers. We can make the process easy for you to compare coverage options and coverage limits that fit your needs and financial situation.

In addition to mandatory coverages like third-party liability car insurance required in your insurance policy, you can also review additional coverages like accident forgiveness.

We also advocate for you when you file a claim to ensure you have support throughout the process.

BrokerLink has branches across Canada to help you buy Toronto car insurance, Edmonton car insurance, or wherever you live.

Get a competitive quote in five minutes, call us, or visit one of our 200+ branches across Canada. Let us help you find the auto insurance cost and coverage that works best for you.

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