Do you understand how deductibles work?

[Scarlett]

For instance if you filed a claim on your vehicle insurance and dropped it off at a body shop for repairs....would you be confused and shocked when you went to pick it up and were told you owed $500?

Once in a while we get that here.  And inevitably they say, 'Oh insurance already took out the deductible.'  Which confuses me....because yes they deducted the deductible from our payment.  And I had a man today tell me that 'you guys added on that $500.'  

Just curious.

[HSmomof2]

Yes, I understand how they work…..but I work in medical insurance, and many don’t understand that deductible either.  😂

[Jean in Newcastle]

I understand how they work.  But I do sigh when I realize that it hasn't been met yet.  And for some things, they are never met in a year and then we start all over again with a new one in January.   So while I'm glad that we didn't have enough dings (either to the car or to our health) to use up our deductibles on those, I'm frustrated that yet again we're paying out of pocket despite still paying our premiums. 

[TechWife]

17 minutes ago, Scarlett said:

For instance if you filed a claim on your vehicle insurance and dropped it off at a body shop for repairs....would you be confused and shocked when you went to pick it up and were told you owed $500?

Once in a while we get that here.  And inevitably they say, 'Oh insurance already took out the deductible.'  Which confuses me....because yes they deducted the deductible from our payment.  And I had a man today tell me that 'you guys added on that $500.'  

Just curious.

No,  not if my deductible is $500. Insurance pays the claim, less the deductible amount, which I pay. If car repair costs $2,000 the insurance will pay $1500 and I pay $500.  I think, though, that a lot of people don’t understand insurance. 

[Miss Tick]

1 minute ago, TechWife said:

I think, though, that a lot of people don’t understand insurance. 

Yes, the misunderstanding is similar to the misunderstanding about how vaccines work. Insurance is generally to keep you from catastrophic cost, but not to keep you from paying anything at all.

Insurance is a bet. The company is saying, "I bet you won't have an accident" and you are saying, "I bet I will!" Then if you do have an accident (or a new teen driver) the insurance company says, "Double or nothing?"

[SKL]

Maybe they are confused because health insurance deductibles work differently from car insurance deductibles.  If I get an expensive medical procedure done in January that costs $3,000 and my deductible is $2,000, I pay that $2,000 one time, but then I don't have to pay the deductible again for the rest of the year.  Unlike car insurance, where I have to pay that $XXX deductible every time I have a mishap, even if it's 3 times in one month.

Or is it me who is confused?  😛

I admit I haven't ever had to worry about insured car repairs more than once in a year.  😛

 

Edited January 11, 2022 by SKL

[JustEm]

That is why I'm glad my insurance company just  cuts me a check minus the deductible. Because I can usually get the work done cheaper than the adjuster determined so I can pocket some of the money. And never use my own money

[Katy]

Yes, but I worked in insurance claims for several years

[fraidycat]

Yes, I understand how they work, in theory.

In reality, the time DH got backed into while at a gas station pumping gas, when we tried to pay the deductible amount to the shop, they said it was covered. THEN, our insurance company sent us a check because the collected the deductible from the other driver to reimburse us. When I phoned them to tell them we didn't pay anything they were confused, so we double checked at the repair shop and they said there was nothing owing. I didn't cash the check until several months later when the ins. company gave me shit for not cashing it because they wanted to close the file. Lol

So we got paid $200 for that incident. 🤷🏻‍♀️

[Scarlett]

1 hour ago, hjffkj said:

That is why I'm glad my insurance company just  cuts me a check minus the deductible. Because I can usually get the work done cheaper than the adjuster determined so I can pocket some of the money. And never use my own money

When an insurance company writes their own estimate it is rare it is even enough for the actual repair.  So I don’t know who is doing your repair work but good deal for you.  

[Scarlett]

1 hour ago, fraidycat said:

Yes, I understand how they work, in theory.

In reality, the time DH got backed into while at a gas station pumping gas, when we tried to pay the deductible amount to the shop, they said it was covered. THEN, our insurance company sent us a check because the collected the deductible from the other driver to reimburse us. When I phoned them to tell them we didn't pay anything they were confused, so we double checked at the repair shop and they said there was nothing owing. I didn't cash the check until several months later when the ins. company gave me shit for not cashing it because they wanted to close the file. Lol

So we got paid $200 for that incident. 🤷🏻‍♀️

What probably happened there is the insurance company failed to deduct the deductible from what they paid the shop.  And of course the shop wouldn’t collect the deductible from you  if it wasn’t deducted from the payment.  When that happens the insurance company does not go after the customer to correct the ins company’s error.  The reimbursement for the deductible from the at fault party is a separate transaction and those two departments apparently do not speak…lol

That works out ok unless their is a supplement.  Then the ins company will see their mistake and take it out of our supplement payment.  It is the responsibility of the repair facility to collect the deductible even if the insurance company failed to deduct it from payment.

[JustEm]

5 minutes ago, Scarlett said:

When an insurance company writes their own estimate it is rare it is even enough for the actual repair.  So I don’t know who is doing your repair work but good deal for you.  

We have never had that issue. We've always gotten our own estimate and given to the adjuster and they've either just signed off on that or the adjuster's price is higher. 

[TechWife]

5 minutes ago, Scarlett said:

When an insurance company writes their own estimate it is rare it is even enough for the actual repair.  So I don’t know who is doing your repair work but good deal for you.  

My son was recently in an accident. The insurance company initially offered about 1/2 of the repair cost. Thankfully, I got an estimate before I responded to the insurance company. The repair shop managed the claim from that point on and they paid considerably more than they initially offered.

[Scarlett]

1 hour ago, SKL said:

Maybe they are confused because health insurance deductibles work differently from car insurance deductibles.  If I get an expensive medical procedure done in January that costs $3,000 and my deductible is $2,000, I pay that $2,000 one time, but then I don't have to pay the deductible again for the rest of the year.  Unlike car insurance, where I have to pay that $XXX deductible every time I have a mishap, even if it's 3 times in one month.

Or is it me who is confused?  😛

I admit I haven't ever had to worry about insured car repairs more than once in a year.  😛

 

I don’t think that is their confusion.  The words they use seems to always be the same—-‘the insurance company already took that ( deductible ) out.’  They somehow equate seeing a payment less deductible as meaning they don’t owe the deductible now.  It really is not logical.

[TravelingChris]

I find that a lot of people don't understand a lot of things, especially with numbers involved.  I understand and so do all my kids too.

[Scarlett]

4 minutes ago, TechWife said:

My son was recently in an accident. The insurance company initially offered about 1/2 of the repair cost. Thankfully, I got an estimate before I responded to the insurance company. The repair shop managed the claim from that point on and they paid considerably more than they initially offered.

Yep.  Very common.  My personal theory is that the insurance company is banking on a percentage of people cashing out and not getting the repairs done.  Insurance company comes out ahead because if the customer goes through with the repair the repair facility will supplement for the actual amount it will take. 
 

Insurance companies deny this is their strategy though.  😂

Edited January 12, 2022 by Scarlett

[TechWife]

2 minutes ago, Scarlett said:

Yep.  Very common.  My personal theory is that the insurance company is banking on a percentage of people cashing out and not getting the repairs done.  Insurance company comes out ahead because if the customer goes through with the repair the repair facility will supplement for the actual amount it will take. 
 

Insurance companies deny this is their strategy though.  😂

One thing a lot of people don’t realize is that there is sometimes damage that isn’t apparent until the shop starts taking the car apart. Insurance companies want to pay based on the pictures you upload, but the pictures don’t tell the whole story - bent rims, radiator leaks, damaged wheel wells, need for an alignment- those are all things that don’t always show in photos. 

I’ve been in more accidents than I can count. Seriously, I lost count in the mid-teens. Only one of them was my fault (I rear-ended someone). I’ve learned a lot over the years - about insurance, police reports (you can ask for corrections), talking to the claims adjuster, asking eye witnesses to stay, accident related medical claims, personal property damage, etc.. I understand the system, but for people who rarely get in wrecks, it can be tricky. 

[gardenmom5]

Yes, I know how deductibles work.

both auto, and health.

[Jean in Newcastle]

There is a difference between an insurance settlement (which in my experience has always been much more than the repair costs) given when it's proven that it's the other guy's fault and a repair that you need that has to be covered by your own insurance company and which needs to meet deductibles. 

[Scarlett]

3 minutes ago, Jean in Newcastle said:

There is a difference between an insurance settlement (which in my experience has always been much more than the repair costs) given when it's proven that it's the other guy's fault and a repair that you need that has to be covered by your own insurance company and which needs to meet deductibles. 

I am only referring to the repair costs to the property/vehicle. An at fault insurance pays to restore it to pre loss condition.  And no one pays a deductible.  

[Farrar]

Yeah, I get it. I think it's pretty straightforward with cars. Maybe when I was a new adult we had a confused moment with it? I can't really remember. The other day I had to explain to a friend what was going to happen with her broken windshield. But she understood deductibles. I was just telling her how the cost of the replacement windshield is nearly always almost exactly your deducible. So it's a total wash and you may as well use your insurance just in case someone smashes your windows again.

With health insurance, it's often not straightforward at all, so I totally understand when people don't understand it. There are a lot of insurance plans that do pay for some things and not others until you meet the deductible. And then even after you meet the deductible, different things are sometimes covered at different rates and percentages. And there can be a cap in addition to the deductible. It's really confusing. On purpose, of course.

[Jean in Newcastle]

15 minutes ago, Scarlett said:

I am only referring to the repair costs to the property/vehicle. An at fault insurance pays to restore it to pre loss condition.  And no one pays a deductible.  

I understand that. Not everyone does. 

[Scarlett]

2 minutes ago, Jean in Newcastle said:

I understand that. Not everyone does. 

And I know that there can be a lot to a claim especially if it goes into personal injury etc.  but I am just asking if people understand the basic concept of a deductible being the amount the customer is responsible for.  

[Acorn]

@Farrar

Auto glass can be a weird category. Some states have policies that insurance companies have to waive the deductible. Your friend should  talk to her agent.

[Tap]

Yep, I understand deductibles. I don't think it is a difficult concept and am surprised when people blame either the business or the insurance company for trying to gouge them. 🤐I work in healthcare, and have to explain it several times per year. The hardest thing for people to understand is that the insurance policy and its deductible/coinsurance/copay/out of pocket max/formulary etc were all negotiated and purchased by someone! And every little detail is available online if they reallllly want to read the very fine print of the policy contract. There is probably insurance that someone can buy that covers every little thing, but it would be soooo expensive that someone who is balking at a deductible couldn't afford it! 

[gardenmom5]

3 hours ago, fraidycat said:

Yes, I understand how they work, in theory.

In reality, the time DH got backed into while at a gas station pumping gas, when we tried to pay the deductible amount to the shop, they said it was covered. THEN, our insurance company sent us a check because the collected the deductible from the other driver to reimburse us. When I phoned them to tell them we didn't pay anything they were confused, so we double checked at the repair shop and they said there was nothing owing. I didn't cash the check until several months later when the ins. company gave me shit for not cashing it because they wanted to close the file. Lol

So we got paid $200 for that incident. 🤷🏻‍♀️

Consider it payment for your time and trouble.

I had the same insurance company as the guy I t-boned**, so the insurance company claimed we were both at fault to minimize their payout.  we sued in small claims, we won - but it still wasn't enough to pay for the hassle and upset I had from that accident.  (or even ALL our expenses.  though thanks to advice from the hive  - we did sue/file for a loss of value on the car. the insurance rep ticked off the judge when she said that was "only for expensive cars, like Lamborghinis.")

**(it was his fault. he was westbound in eastbound lanes.  After the police officer came back from watching the traffic cam video, he was white as a sheet. and said: it wasn't your fault. - I later learned, that video made the rounds at the station because of how egregious it was.)

Edited January 12, 2022 by gardenmom5

[Robin M]

I didn't understand deductibles until I got a job with USAA as a insurance customer service rep eons again and went through all the training for auto and home insurance.  It's one of those things I discovered people don't think about until something happens, no matter how I explained it at the time of issuance. 

[J-rap]

I understand how they work, but there are unusual situations.  For example, my dd was in a car accident through no fault of her own, so the other driver's insurance paid for my dd's hospitalization, etc. 100%.   No deductible needed at our end, but I'm sure the other driver had a deductible to pay.  Later, our dd was offered a payout of several thousand dollars, if she signed off to close the case, which she did.  That's how she bought her nice laptop for college.

Edited January 12, 2022 by J-rap

[Scarlett]

7 minutes ago, J-rap said:

I understand how they work, but there are unusual situations.  For example, my dd was in a car accident through no fault of her own, so the other driver's insurance paid for my dd's hospitalization, etc. 100%.   No deductible needed at our end, but I'm sure the other driver had a deductible to pay.  Later, our dd was offered a payout of several thousand dollars, if she signed off to close the case, which she did.  That's how she bought her nice laptop for college.

The at fault driver would not have a deductible for your daughters claim.  The deductible would only apply if the at fault driver had a claim of their own.,

[Murphy101]

Most people have zero clue how nearly anything in their lives functions or how to understand what they are buying.  They have zero idea what, if anything, their coverage for their house or car even is.  They have no idea what kind of mortgage they have or their house payment includes their taxes and insurance (seriously. There’s a reason most title companies push to have it included.)

Though to be fair insurance of any kind has always been a casino game.  We pay a ton of money every single month in the hopes that the spinner wheel of fate doesn’t land on a bad slot and that if it does land you in a bad spot, you still have to pay even more money but hopefully not the total cost, which has now been exponentially inflated bc of insurance.

[Murphy101]

6 hours ago, hjffkj said:

That is why I'm glad my insurance company just  cuts me a check minus the deductible. Because I can usually get the work done cheaper than the adjuster determined so I can pocket some of the money. And never use my own money

Yep. This. 

4 hours ago, Acorn said:

@Farrar

Auto glass can be a weird category. Some states have policies that insurance companies have to waive the deductible. Your friend should  talk to her agent.

States can do that. But also, many car insurance companies have special rules for glass. We specifically bought a policy that had generous coverage for glass bc I swear my vehicles are a magnet for itty pebbles to the windshield. first windshield was covered 100% when I kid you not a pebble cracked my new van’s windshield as a drive home from the lot. 😫

But again. Most people never look at what their policy covers.  Most just look for the cheapest policy they can find and grab it. 

Edited January 12, 2022 by Murphy101
Bc I read back and saw it didn’t matter

[Soror]

{knock on wood} We've only had one auto claim. Vehicle was totaled and they sent us a check minus the deductible.

We've had multiple claims on the house- total loss- house fire, hail- roof, and something else I think. We got a check for those minus deductible as well. Mil got her roof replaced as well. She was very upset when they didn't give her the full amount they originally quoted as it was thousands less than her receipt. Ours was maybe $500 under and we got to pocket that but they had a limit on how much they would pay over the receipts.

It makes total sense if I had to take it somewhere and the insurance was paying them directly and it was the full cost I'd have to pay the remainder- ie- the deductible to the auto place. 

 

[Carrie12345]

Yes, I do. I’m not sure if that’s influenced by the fact that I’ve had to shop for new health insurance more years than I’ve been able to carry over a policy, but I do feel like I’ve earned a degree in insurance policy comparisons, which includes all aspects of coverage from premiums, copays, deductibles, maximums, and “networks”. Oh, and co-insurance, which bites.
I have extensively used health insurance, rarely used auto, and only used homeowners once or twice. But it’s basically all the same.

My 19yo is the only one of my kids so far to hold her own policies (health and auto, though now she’s back on our health), and I don’t know that she *fully understands all of the details, but she does seem to have a basic grasp for a newbie.

Edited January 12, 2022 by Carrie12345

[Scarlett]

So it seems like most of you fully understand that you would owe your deductible.  I am not surprised----pretty typical for this board to be knowledgeable about life and such.  I have been doing customer service my entire life and every time this comes up and someone things they don't owe the deductible I am always almost speechless.  I have finally fine tuned an explanation that doesn't sound condescending.  It is interesting to me that they all say the same thing, 'Insurance company already took out the deductible.'   I would love to understand what they think that means exactly but emotions are always so high I can never really get to the bottom of it.  I guess if I understood what they are thinking I would be in a better position to explain it to them so they understand. 

I hate that feel I get when they seem to be implying we are ripping them off somehow. Yesterday the man yelled at me, 'HOW MUCH IS YOUR BILL!!'  I was already walking over to him with the invoice in my hand which has everything detailed.  As I tried to show it to him he repeated, 'HOW MUCH IS YOUR BILL!'  I wanted to say, 'It really doesn't matter if our  bill is 10K, your part is still going to be $500.'  But I did not say that.  I showed him, 'our bill was 3800, your insurance company has paid us 3300.  That leaves a balance of $500 which is your deductible and which is your responsibility.'  

They finally quit arguing with me and handed me a debit card which was declined.  😞  They have to come back at the end of the week to get their car.  It makes me feel terrible.

[QueenCat]

10 hours ago, Murphy101 said:

Yep. This. 

States can do that. But also, many car insurance companies have special rules for glass. We specifically bought a policy that had generous coverage for glass bc I swear my vehicles are a magnet for itty pebbles to the windshield. first windshield was covered 100% when I kid you not a pebble cracked my new van’s windshield as a drive home from the lot. 😫

But again. Most people never look at what their policy covers.  Most just look for the cheapest policy they can find and grab it. 

Dh's car is a magnet too! And not just the front window. Had a side window shatter once from a rock hitting it. That was super scary as I thought someone had shot at us.

[Jean in Newcastle]

2 hours ago, Scarlett said:

So it seems like most of you fully understand that you would owe your deductible.  I am not surprised----pretty typical for this board to be knowledgeable about life and such.  I have been doing customer service my entire life and every time this comes up and someone things they don't owe the deductible I am always almost speechless.  I have finally fine tuned an explanation that doesn't sound condescending.  It is interesting to me that they all say the same thing, 'Insurance company already took out the deductible.'   I would love to understand what they think that means exactly but emotions are always so high I can never really get to the bottom of it.  I guess if I understood what they are thinking I would be in a better position to explain it to them so they understand. 

I hate that feel I get when they seem to be implying we are ripping them off somehow. Yesterday the man yelled at me, 'HOW MUCH IS YOUR BILL!!'  I was already walking over to him with the invoice in my hand which has everything detailed.  As I tried to show it to him he repeated, 'HOW MUCH IS YOUR BILL!'  I wanted to say, 'It really doesn't matter if our  bill is 10K, your part is still going to be $500.'  But I did not say that.  I showed him, 'our bill was 3800, your insurance company has paid us 3300.  That leaves a balance of $500 which is your deductible and which is your responsibility.'  

They finally quit arguing with me and handed me a debit card which was declined.  😞  They have to come back at the end of the week to get their car.  It makes me feel terrible.

As someone stated up thread, an auto insurance deductible differs from health insurance. Your have to meet it for each claim. I would suspect that that’s the issue that they don’t understand. 

[Scarlett]

3 minutes ago, Jean in Newcastle said:

As someone stated up thread, an auto insurance deductible differs from health insurance. Your have to meet it for each claim. I would suspect that that’s the issue that they don’t understand. 

I don't think so.  And the reason I don't think that is is is because they always reference the paper work from the insurance company......oh well, I guess I will just have to deal with it.  Doesn't happen that often.