Did you know that Canadians owe more than $2 trillion in debt? Unfortunately, this debt can make it challenging to plan for unexpected financial situations.
For example, let’s say you get in a car accident. You file a claim with your insurance company and find out you have to pay a $500 deductible. So what happens if you can’t pay your insurance deductible?
And what’s the solution? If you want to learn the answer to these questions and more, you’re in the right place. In this guide, we’ll teach you everything you need to know about this problem.
What Is an Insurance Deductible?
Before we begin, it’s important to first understand exactly what a deductible is. An insurance deductible refers to the amount of money that you need to pay yourself in order for your insurance provider to pay the rest of the claim.
Let’s say you’re one of the 74,000 people that get in a car collision each year. The accident ruins your front bumper. The repairs are roughly $1,500, and you have a $250 deductible.
That means that you need to first pay the $250 before your insurance company will cover the remaining $250. But what if you get in a minor accident that requires $200 in repairs?
Unfortunately, that means you’ll need to pay for the repairs entirely on your own. Your insurance company won’t cover anything that’s below your deductible.
How Do These Deductibles Work?
There is no one-set deductible for every policy. Instead, you choose your coverage limits when you select your policy. It’s common to see deductibles range from $250 to $1,000 for an auto insurance policy.
Generally speaking, the more your pay for your out-of-pocket deductible, the lower your monthly insurance costs will be. So, it can be a bit of a gamble choosing a policy with a high deductible.
You will likely save money on your monthly premium. But, if you get into an accident, you could be left with a high mechanic’s bill that you’re responsible for.
And if you can’t pay that amount it can be a problem. Let’s take a closer look at what happens when you don’t have money for your deductible.
What Happens If You Can’t Pay Your Insurance Deductible?
Sadly, you have a contractual obligation to your insurance provider when you sign on the dotted line. That contract states that in order for you to get the benefits of your insurance policy, you need to uphold your end of the bargain.
Having the financial means to pay the deductible is part of that bargain. That means that your insurance provider is allowed to withhold all the benefits of your insurance policy if you don’t pay the deductible.
This can be a serious problem if you rely on your car for work and it’s currently out of commission.
Solutions to This Problem
If you don’t have any family or friends that can loan you the money, you might think you’re out of luck. But the good news is that there are things you can do when you can’t afford your deductible.
In this section, we’ll discuss some of the solutions you can use when you don’t have enough money to pay for your deductible.
And remember that in the future, you should research better insurance options so that you don’t encounter this type of problem.
Wait Until You Have the Money
Sometimes all you need do to pay a deductible is wait a week or two for your paycheck. If that’s the case, then you should just wait to file your claim.
Make sure you have photo evidence of the accident and details of when it occurred. Then when you have the deductible money, file the claim and pay for it.
If you do this method, you should be sure to check the statute of limitations on your insurance policy.
Usually, this is less than one month, so you shouldn’t wait too long. Also, make sure you aren’t driving your damaged car while you wait to get the deductible money.
Take Out a Loan
Short term loans are another great method for getting deductible money. These loans tend to be between $500 to $1,000, which is what the average deductible costs.
The most important thing with this option is to look for a provider that offers fast loans. That way, you can get the money to pay for your deductible fast.
Typically, the best way to do this is with online loans. These options allow you to fill out an application and find out the same day if you apply.
But what if you have bad credit? Look for no credit check loan providers. These lenders cater to low-income individuals.
Discuss a Payment Plan With the Auto Shop
In some cases, you might be able to work out a payment plan with the auto shop or mechanic to afford your deductible. Ultimately, whether or not the mechanic will broker a deal depends on the specific shop.
If they refuse, then you can try to find another one. But, depending on where you live, you might have difficulty finding one. In this event, a loan might be your best option.
Need a Personal Loan For Your Insurance Deductible? Contact Eastern Loans
We hope this article helped you answer the question, What happens if you can’t pay your insurance deductible? At EasternLoans, we know that life can often throw financial curveballs.
That’s why we offer quick cash loans that are fast, easy, and convenient. With our loans, you can quickly get the money you need to pay off your deductible.
So, if you’re ready to get the cash you need, then contact us today to find out if our loans are right for your needs.