Whether you have car insurance, renters insurance or even health insurance, you base your deductible, or out-of-pocket costs, on your premium. A higher deductible means you pay lower premiums. Having trouble coming up with your deductible amount suggests readjusting your insurance premium to lower your deductible, but this would mean paying a higher monthly premium. You do have several options to deal with an insurance deductible you can’t afford.
When you file a claim, you need to pay your deductible amount before your insurance company pays the remaining amount. When you get car insurance, for example, you might not think about the deductible; you’re just glad to have coverage on the car. If you later file a claim but are short the funds you have to pay, you could use the time before the deductible amount is due to borrow money, if you can pay it back, or sell something you don’t really need for quick cash. There are other options that might be better.
If you’re lucky, your car is still drivable after an accident or damage. You need to report accidents and claims to the insurance company immediately, but you don’t necessarily need repair work performed right away. For example, exterior damage to the front or side of the car can wait, as long as you can safely and lawfully drive your car. Use the time to save up money for the deductible. You can also drive the car around to shop for the best auto repair deals.
You might be allowed to limit the amount of repair work done on your car. The insurance company will pay you for the repairs, but you can often choose what gets done. The car needs necessary mechanical work, but avoid any cosmetic additions that increase costs. Talk to repair shop personnel about needed repairs to fit your financial situation. Find out if your insurance company sends you payment or sends a check to the repair shop for a better idea on how much time you have to get your car drivable again.
Similar methods might apply to lost possessions under renters insurance, which you purchase to safeguard damaged or stolen belongings. You need to report claims on lost items as soon as possible, but check with the insurance company’s policy on payment to get as much extra time as you can to raise more money for the deductible. As for health insurance, federal laws now offer plans to help cover deductibles and premiums.
Use your experience with an unaffordable deductible as a lesson. Set up a savings account or some type of emergency fund to put aside a specific amount to take care of any deductibles in the future. Ask your current insurance company about plans for reduced cost, or shop around for insurance at lower cost and even better coverage. Insurance companies are very competitive and want your business.
Jerry Shaw writes for Spice Marketing and LinkBlaze Marketing. His articles have appeared in Gannett and American Media Inc. publications. He is the author of "The Complete Guide to Trust and Estate Management" from Atlantic Publishing.