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When do you pay the deductible on your car insurance policy?

May 12, 2010

Most drivers know that their deductible is an amount they must pay towards a claim before their insurance company pays.  However, it is a common misconception that the deductible must be paid every time a claim is made.  Although in most cases the deductible is enforced, there are instances where it is not.  The following are some common examples of when a deductible is applicable and when it is not, in the province of Ontario.

You are involved in an accident where you are 100% “at-fault”
Insurance companies use a set of guidelines called the Fault Determination Rules, which are detailed in the Automobile Insurance Act, to determine who should be deemed "at-fault" in a car accident in Ontario.  If you are determined to be completely at-fault, then you will have to pay the deductible on your car insurance policy.

You are involved in an accident where you are not “at-fault”
If the insurance companies of the parties involved determine that you are not at-fault, you do not have to pay the deductible on your car insurance policy.   Your repairs will be covered under the Direct Compensation portion of your policy, which is a mandatory coverage in Ontario.

You are involved in an accident where you are partially “at-fault”
If you are determined to be partially at-fault by the insurance companies involved, you would then have to pay only a percentage of the deductible.  For example, if you are deemed to be 50% at-fault, you would be responsible for paying 50% of your deductible.

Your vehicle has been hit by an unidentified third party (hit & run)
This is an unfortunate situation to face. If you do not have Collision coverage on your car insurance policy, you may not be covered for this type of loss.  In this situation, you will have to pay for any repairs, or replacement of your car at your expense.   However, if you are able to identify the person who hit your car, the loss would then be covered under the Direct Compensation portion of your insurance policy, for which you do not have to pay a deductible.   The person who hit your car must also have an insurance policy for this type of coverage to apply. 

Your vehicle has been stolen or vandalized
Should your vehicle be stolen or vandalized in some way, the Comprehensive portion of your car insurance policy would cover the damages.  You will, however, have to pay the deductible.

When in doubt, be sure to ask your insurance professional about what coverage is most appropriate for your particular situation and if a deductible payment will be necessary when making a claim. 

  • john

    Hi thank you for this valuable information. I am little confused with not at fault mandatory coverage which you have explained here. I was talking to my insurance company TD today to reduce my auto insurance and they told me if I increase my not at fault deductable to 1000 then the overall monthly premium will go down by $20 bucks. Is that true

  • InsuranceHotline

    Hi John,

    Each insurance company is different. If TD has quoted you $20 less by increasing your deductible for not at-fault coverage, it should be correct.

    Typically, increasing any of your deductibles will low your insurance premium.

    Hope this helps.
    Nick

  • InsuranceHotline

    Hi John,

    Each insurance company is different. If TD has quoted you $20 less by increasing your deductible for not at-fault coverage, it should be correct.

    Typically, increasing any of your deductibles will low your insurance premium.

    Hope this helps.
    Nick

  • Mike

    I believe some of the information here is inacurate. My wife was recently involved in an auto accident where she was proved not to be at fault. The insurance company is still insisting that she pay her $1000.00 deductable (TD). Not sure what`s up with that. Starting to wonder why we pay for insurance altogether.

  • http://www.insurancehotline.com/ InsuranceHotline.com

    Hello

    If you have a deductible under the direct compensation (in Ontario) section of the policy then the deductible applies.
    The direct compensation section of the policy provides coverage when you are deemed to be not at fault. There is typically no deductible for this however, some consumers choose to apply a deductible to reduce their payments.

    In the case where she was “proved not at fault” check with your adjuster to make sure that they have agreed that she was not at fault. The claims adjuster uses certain rules to determine fault so you’re best to get clarity from them on exactly how they are rating this accident.

  • http://www.insurancehotline.com/ InsuranceHotline.com

    Hi Jason,

    I believe you only pay HST if your vehicle is used for business purposes, however, that is a great question for your broker/agent – just to confirm the specifics of your policy.

  • Davis

    I am an Insurance adjuster and I know for a Fact that your deductible applies during a hit and run accident IF you are claiming under your own Collision policy. This article is not correct.

  • http://www.insurancehotline.com/ InsuranceHotline.com

    Hello

    Thank you for your comment. I have taken a look at the article and it states that you will have to pay your collision deducible if you are hit by an unknown party. See the paragraph below. (The article itself it entitled when do you pay the deductible on car insurance.

    Your vehicle has been hit by an unidentified third party (hit & run)
    This is an unfortunate situation to face. If you do not have Collision coverage on your car insurance policy, you may not be covered for this type of loss. In this situation, you will have to pay for any repairs, or replacement of your car at your expense. However, if you are able to identify the person who hit your car, the loss would then be covered under the Direct Compensation portion of your insurance policy, for which you do not have to pay a deductible. The person who hit your car must also have an insurance policy for this type of coverage to apply.

  • http://www.insurancehotline.com/ InsuranceHotline.com

    Hello

    You should check with your insurance professional. It may depend on the province that you are in.

    Thank you

  • http://www.insurancehotline.com/ InsuranceHotline.com

    Hello

    Yes, you will likely have to pay the comprehensive or collision deductible.

    Thanks

  • Louise

    I was in a small at fault fender bender a few months ago. Our deductible is 1000 and we just haven’t had a chance to get my front fender fixed yet. However, yesterday I was involved in a hit and run. No witnesses. My car was parked in a parking garage. No cameras. Damage is far more significant than my fender bender…. I have a few questions….1) Will I have to pay 2 deductibles 2) How will this affect my insurance premiums? I have been accident free for over 3 years and have small and large accident forgiveness on our insurance plan.

    Thanks for any advice!

  • http://www.insurancehotline.com/ InsuranceHotline.com

    Hello

    In Ontario with most insurance companies a hit and run claim requires that you have a police report. If you have collision the damage may be covered but you will have to pay the deductible.

    Thank you

  • dems

    someone had hit and run my car in a parking lot while I was away from it.
    I see that he/she came from the right rear and was going towards the left rear of my car and rubbed the back area.
    It has some scratches in the lower black plastic bumper area,
    paint from the other vehicle and part of the plastic on the actual bumper.
    In about a 2 foot squared area.
    And one of the clips holding the bumper broke.
    there doesnt seem to be any scratches on the bumper itself.
    2014 sedan lease, 5 year warranty
    There was no note or anything left nor any witnesse that I know of.
    I believe that I can remove the paint and plastic from my bumper but the clip to attach my bumper might be hard to get.
    Is it worth getting insurrance and everything involved, would my insurrance go up?
    or should I do it myself/have one of my mechanic friends help me?

  • http://www.insurancehotline.com/ InsuranceHotline.com

    Hello

    If you reported this hit and run to the police and your insurance company you will not be held at fault for the claim but you will have to pay your deductible. It might be less expensive for you to fix it yourself. You’ll have to decide that.

    Thanks

  • http://www.insurancehotline.com/ InsuranceHotline.com

    Hello

    A deductible on liability is something that some insurance companies offer. It sounds like your company might have this.

    Thanks

  • http://www.insurancehotline.com/ InsuranceHotline.com

    Hello

    In Ontario, if the other driver is unidentified you will likely have to pay your collision deductible.

    Thanks

  • jon

    in this case Your vehicle has been stolen or vandalized

    Should your vehicle be stolen or vandalized in some way, the Comprehensive portion of your car insurance policy would cover the damages. You will, however, have to pay the deductible.

    When in doubt, be sure to ask your insurance professional about what coverage is most appropriate for your particular situation and if a deductible payment will be necessary when making a claim.

    does your inssurance goes up ?

  • http://www.insurancehotline.com/ InsuranceHotline.com

    Hello

    you should not see an increase as a result of a comprehensive claim. If you have had many comprehensive claims in the last 6 years, your company may increase your deductible.

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