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How to Save Money on Your Auto Insurance Deductible
The Insurance Claim Process
Nearly all automobile owners will file an insurance claim at least once in their lifetime. And, depending on your insurance company or carrier, it can be a very smooth process or it can be a very harrowing one.
Once you have called your claim in, an insurance adjuster will typically contact you within within 24 to 48 hours; your company may send an actual "field adjuster" out to where your car is located to write an estimate or you may be given the option to go directly to a repair facility/body shop for an estimate. Most shops provide "courtesy estimates" free-of-charge. What your particular insurance company does is largely dictated by internal company policies and varies greatly from company to company. The bottom line is that someone with estimating knowledge and skills will need to appraise the damage to your vehicle. It's important to note that an estimate is just that - an estimate. The shop may discover additional, hidden damage once the vehicle is "torn-down" for repairs. In fact, this is more the rule rather than the exception.The repair facility will then contact your insurance company and request what is known as a "supplement." The adjuster will review the request and either negotiate an agreed cost on the additional repairs or agree to pay the supplement outright. Either way, in most cases you will only be responsible to pay your portion of the claim - the deductible, and you pay this at the very end when you pick up your car and are, of course, satisfied with the repairs.
What is a Deductible?
Quite simply, a deductible is the portion of the claim, any claim, that you as an insured agree to pay in the event of loss. A "loss" is insurance-speak for a claim. And the deductible applies for each separate occurence - there is no such thing as "meeting your deductible" and not having to pay it on subsequent claims during a policy period. So your deductible is very much like the co-pay you pay at the doctor's office, dentist's office, etc.
Depending on the insurance carrier, you can have a deductible as low as "zero dollar" for comprehensive coverage or as much as $1000.00 or more for collision coverage. Some insurance carriers no longer "allow" low-dollar collision deductibles as this tends to prevent what are known in the industry as "nuisance claims" or claims involving very minor property damage. Let's face it - claims are expensive to process, adjust, etc. It can cost an insurance carrier well over $300.00 internally to process a claim - whether it's for $200 worth of damage or $10,000. And to keep premiums as low as possible and of course competitive, auto insurers are slowly but surely "raising the bar" on insurance deductibles.
How to Save Money on Your Deductible
Due to a wave of class-action lawsuits during the 1980's and 1990's, insurance companies began to shy away from quoting after-market parts in their collision repair estimates. Consumers' attorneys argued that non-original equipment manufacturers' parts somehow "diminished" the quality of the repair and put the policy holder in a lesser position than they were in prior to the claim. And in all fairness, some after-market parts were junk back then - some still are, but the vast majority of today's after-market parts are indistinguishable in form, fit, finish, and quality from the original vehicle manufacturers' parts. CAPA or the Certified American Parts Association, a non-profit agency established in 1987 to oversee the testing, quality, and suitability of parts, is to thank, in large part, for the increase in quality and affordability of these crash parts. And this is how you can save BIG money on your deductible.
If your insurance company wrote original equipment manufacturers' parts on your repair estimate, ask the shop to substitute an after-market part instead. Depending on the state you live in, you may be ask by the shop to sign an acknowledgement that you are aware after-market parts are being used in your repair. This is more a parts warranty issue than anything else; if something goes wrong with this part, the after-market supplier or manufacturer is responsible to make it right - not your vehicle manufacturer.
An example: A factory fender costs $225.00
The same fender in after-market costs $75.00 - a $150.00 difference!
Savings to you is $150.00 - and that savings you can apply toward your deductible. And that is a savings on one part only. It doesn't take long on a moderate-sized claim to "save" $500.00 on your deductible. And there is nothing unethical or illegal in doing this. It's your car and the ultimate choice on parts rest with you, the vehicle owner.
On smaller claims, say those under $500.00, ask the shop for a discount. There is a lot of profit in auto body repair. And smaller shops tend to have lower overhead; with lower overhead they can pass more savings onto you, the consumer, in the way of a discount. A 10% to 15% discount off the retail cost of the repair is not asking too much of your repair facility.
A Final Word on After-market Parts
Some repair facilities will attempt to tell you that after-market parts are somehow "inferior" to your vehicle manufacturer's parts. The truth is this: profit margins on after-market parts are often higher than on OEM parts. In other words, the shops make more money, more profit using these parts. I have used after-market parts for years on my vehicles and I never had an issue with them, and I have rarely paid my full deductible.
SEE other insurance articles by this author: http://hubpages.com/hub/Inexpensive-Home-Business-Start-ups-Independent-Insurance-Adjuster
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An insurance professional (don't hate me) and family man by day, I become "manic man" by night and explore hot-button topics ranging from...