insurance

Waiver of Deductible

A provision that allows an insurance company to waive or eliminate the policyholder's deductible under specific circumstances. This means the insurer will pay the full claim amount without requiring the policyholder to pay their usual out-of-pocket deductible first.

Example

“After the other driver was found 100% at fault for the accident, Sarah's insurance company applied a waiver of deductible, so she didn't have to pay her usual $500 collision deductible for repairs.”

Memory Tip

Think 'WAVE goodbye to your deductible' - the insurance company waves away your out-of-pocket cost.

Why It Matters

This provision can save policyholders hundreds or thousands of dollars in out-of-pocket expenses when they're not at fault for an incident. It provides financial relief during already stressful situations like accidents or property damage, allowing people to get back on their feet faster without depleting their savings.

Common Misconception

Many people think deductible waivers are automatically applied to all claims, but they typically only occur under specific conditions like when another party is clearly at fault. Some also believe that waiving the deductible means getting money back, when it actually means not having to pay the deductible in the first place.

In Practice

Maria has auto insurance with a $1,000 collision deductible. When another driver runs a red light and hits her car, causing $8,000 in damage, the other driver is found 100% at fault. Instead of Maria paying her $1,000 deductible and receiving $7,000 from her insurer, the waiver of deductible provision allows her insurance company to pay the full $8,000. Her insurer then seeks reimbursement from the at-fault driver's insurance company.

Etymology

From the legal term 'waiver' meaning to voluntarily relinquish a right or claim, combined with 'deductible' from Latin 'deducere' meaning 'to lead away' or subtract.

Common Misspellings

waiver of deductablewavor of deductiblewaver of deductiblewaiver of deductibel

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