A reader wants to know when he has to pay his deductible and to whom. Here are some general rules, although they do not always apply.
Your deductible applies on “first party claims.” A first party claim is basically any claim to have your car fixed. (As opposed to a third party claim where the insurance company is paying someone else.) If the car is going to be repaired, you pay your deductible to the repair shop. If the car is a total loss, they deduct the deductible from the value of the car. So, if the car is worth $10,000 and you have a $500 deductible, they will pay you $9,500. If your car is being repaired and the repair costs are $5,500, they will pay $5,000, assuming you have a $500 deductible.
But note that your deductible may be waived by the policy terms. For instance, if you and the other party are both insured with CSAA, they will waive deductibles in an accident.
One last word on deductibles. Pick a deductible that you can afford, but not the lowest one. So, if you cannot afford to come up with $500 or $1,000, do not choose that as your deductible. But, by choosing a higher deductible, you will save money on your premium.