How Does Car Warranty Deductible Work? What is it?

What You Need to Know About Deductibles

Shop around for extended car warranties online to get the right cover. This buys you peace of mind! 

Deductibles have played an important role in car insurance for decades. Understanding how deductibles work is important. Do you know what a deductible is and how it works? We unpack a couple of questions you might have about deductibles.

How Does Car Warranty Deductible Work?

A warranty deductible is the sum of money car owners pay towards repair costs. You subtract the deductible from what your insurance pays out when you claim for an incident. This is how insurance providers share risks between car owners and the provider.

The higher the deductible, the lower your monthly payments. Deductibles are specific amounts, or they are a percentage of the full amount of a policy.

Terms of coverage establish amounts. You can find deductible amounts on the declarations or front page of your auto insurance policy document.

State insurance regulations vary from one state to the next. These regulations dictate the wording for deductibles in the policy. They specify how insurers apply them.

What About Deductibles & Claims Resulting From Hurricanes & Storms?

The focus, far too often, is on a home warranty plan for intense storms. According to CARFAC, hurricane damage affected over 347,000 automobiles in 2024. Car insurance companies will cover repairs from hurricane damage. But only if you have comprehensive cover.

• Automobile owners seeking hurricane protection need to get comprehensive coverage 
• Insurance companies could place a moratorium on selling new car insurance policies during storm warnings
• Taking precautions for impending hurricanes could protect your vehicle during storms

Be Sure to Save For Unexpected Deductible Costs

No-one likes surprises that affect our budget. Don’t let unexpected repairs leave you out-of-pocket.

Know upfront what you must pay for deductibles. Saving for or having an extended warranty plan can put you in good stead.

Most extended auto warranties charge a deductible. This is the cost to you, the consumer, for repairs even when you have cover. If the deductible is more than the repair, you end up paying for the entire repair! 

Take note:

All repair shops representing a brand have to accept and repair your vehicle. The factory warranty terms require them to do this.

New vehicles come with a factory guarantee. This covers defective parts or poor workmanship.

It does not cover damages caused by vehicle accidents. Neither does it cover abuse of a vehicle. When your car is under a manufacturer’s warranty, you don’t pay for repairs stipulated in that warranty.

Both factory warranties and extended warranties have pros and cons. Know what the warranty excludes. Ask your warranty company for clarification if you are not sure what your deductible is.

How to Empower Yourself With Information

Knowledge is power, so the adage goes. Arm yourself with information from the time you sign for an extended warranty will put you in good stead.

You will pay a deductible for most comprehensive coverage plans. This is similar to a car insurance plan.

But contracts with automakers often have lower deductibles. We compare this to third-party contractors. Compare car warranty covers to find out which is the most suitable for your needs.

Deductible Amounts Vary Considerably

Deductible amounts vary depending on the warranty company. Amounts could vary from 0 and others can reach a high of $2 500! 

Each automobile insurance service provider offers a broad range of options. Most extended warranty service providers and insurance companies don’t include zero-deductible options.

If you have a car lease or loan, most agreements include a maximum deductible of up to $500. No more. Automobile owners can choose lower deductible amounts, but not higher.‍

In practically all US states, automobile drivers need a minimum amount of car insurance cover. This is a prerequisite for driving legally on public roads. 

Warranty covers take care of bodily injury liability. It also covers property damage. It does not include automobile collision and comprehensive insurance.‍

When Don’t Deductibles Apply?

The short answer is yes. Some exceptions exist. The circumstances listed below are some examples:

• Liability insurance does not charge deductibles. You don’t have deductibles added to liability-only coverage. For repairs resulting from at-fault collisions, you pay for these out of your pocket. This also applies to any other damages caused by you.
• If you did not cause an accident, the other driver is at fault. The driver who is guilty must pay for the damages. Your auto insurance won’t expect you to pay a deductible if you are not at fault.
• In some situations, your auto insurance company will waive your deductible. This could happen if the other driver caused the accident and has little or no insurance.
• Some states prohibit warranty services for charging deductibles for glass coverage. Your comprehensive insurance cover will cover broken windshields. You will pay a deductible. Many warranty companies offer separate cover for your windshield. This falls under the full glass coverage section. Whether you pay for a deductible or not, dependents on various warranty covers.

Find the Balance When Increasing Your Car Insurance Deductible

Getting the balance right when  increasing your car insurance deductible is important. Your decision centers on paying a lower premium per month, and having better coverage for an incident. But you will have to pay for the deductible out of your pocket.

Get an extended warranty cost in seconds online. This will give you some idea what your future costs will look like. Routine maintenance will keep your wheels in good condition.