Let's consider what happens in a car accident for which you have coverage. If the damage inflicted costs significantly more than just your deductible amount, you'd only be responsible for paying out the deductible (smaller portion of the damage), whereas your insurer would cover the amount of damage in excess of your deductible — sounds like a good deal, right?
Here's an example: Your vehicle is damaged in an at-fault accident, and you're unsure of how much the damage will cost you. You do, however, know your policy states a $1,000 Collision deductible, so what happens next? Regardless of who your insurer is, let's talk about 2 ways that you can handle this situation.
Option 1: Your insurer first confirms the total cost for repairs. In this instance, they determine that your repairs will amount to $10,000. You communicate to the insurer that you'd prefer to take your car to your local mechanic. Since your policy states a $1,000 deductible, they will send you a claims cheque for $9,000 to cover the cost of repairs.
Option 2: Alternatively, you could choose to take your vehicle to a preferred repair shop, typically offered as an option by your insurance company. In this case, once the repair costs are finalized, the insurer would pay for the damage directly to the repair shop and you will be responsible for paying your $1,000 deductible once you pick up your vehicle.
Let's now consider what would happen if the damage inflicted is valued at less than your deductible. If, for example, your at-fault accident causes damages worth $500 and you have a $1,000 deductible, you'd then be responsible for covering the damage from your own pocket — without the involvement of your insurer. That means any amount of damage less than the deductible amount would be your responsibility to repair and pay for.
If, for example, your car is a Total Loss and therefore cannot be repaired, you would work with a Claims Advisor who will present you with your vehicle’s value. Then, typically, your insurer would send you a claims cheque for your Total Loss amount, but whether you need to pay your deductible or not will depend on the nature of your loss and/or any specific coverages that could waive the deductible amount.