Why do I have to pay two deductibles for my insurance claim?
Thankfully this situation doesn’t happen that often. But when it does, the confusion and anger that the insured experiences is very real. This post is going to walk you through a claim example when two deductibles were required, and explain WHY. But in order to have a better understanding, we must start with two definitions that are CRUCIAL to insurance claims- occurrence AND proximate cause.
What does “Occurrence” mean and why does it matter to insurance claims?
So an occurrence is the trigger for an insurance claim. In order to have a claim, something has to happen right? The occurrence is the “happening.” Another way to think about occurrence is this- it’s a single event that results in a single insurance claim. Keep that word single tucked away- it will become very important as we work through the example.
Proximate Cause and why it also matters to insurance claims
Proximate cause is also closely related to insurance claims. It means an unbroken chain of events leading up to an occurrence. It may also be defined as the original cause of damage. This definition will also be very important in our examples.
So, let’s go to a claim example.
Claim Example- the windshield and the deer
This one actually happened to a friend of mine. She was driving on a highway, when a nearby vehicle flipped a large stone onto her windshield. It cracked the windshield, but she could still see safely enough to drive. So she continued to her destination. Not 30 minutes later she hit a deer, causing front end damage.
How the Insurance Company Responded and Why
When she reported the claim to her insurance company, they told her she would be responsible for two deductibles because it was two claims. Needless to say, she was furious and couldn’t understand why. The next several paragraphs explain why.
First, it’s helpful to point out that both the glass breakage and deer hit are examples of comprehensive claims (as opposed to collision). And comprehensive coverage usually has a deductible. In this case, her comprehensive deductible was $500.
Back to the claim- what was the first thing that happened? The rock hit her windshield and cracked it. So the rock was the proximate cause of the claim.
What happened next? She hit the deer, causing front end damage. What was the proximate cause of the front end damage? The deer.
The rock hitting the windshield did not cause the front end damage. Likewise, the deer hitting the front end did not cause the windshield damage.
If an occurrence is a single event that results in a single insurance claim, then the rock hitting the windshield is ONE occurrence. The hitting of the deer is ANOTHER occurrence. This equals TWO claims.
So, she had to pay $500 for the windshield claim and $500 for the deer claim.
We’ve had claims where the deer was hit first, then bounced up and broke the windshield. In this case, it is one occurrence, subject to one deductible. Think unbroken chain of events leading to an occurrence.
I’m not going to lie- if you’re the insured, this sucks BIG TIME. You’re going to be hopping mad and think it’s terribly unfair. And it’s OK to feel like that. My goal here is to not make you magically be OK with it, but to explain WHY it happens.
I could probably offer other examples, but it all boils down to this: in order for one deductible to apply, there must be an unbroken chain of events leading to one occurrence. Two or more occurrences = more than one deductible.
Following are some of our most popular posts concerning insurance claims. Take a read:
