What is a Deductible?
A Deductible is the amount you pay for a covered loss before the insurance company begins picking up the bill. For example, if you owned a policy with a $200 deductible and you suffered a covered loss totaling $1,000, you would pay the first $200 and the insurance company would pay the remaining $800. If the loss were only $200, you would pay the entire amount and the insurance company would pay nothing.
What Do Deductibles Mean To Me?
For some insurance coverage's, you are asked to choose a deductible. Higher deductibles will generally result in lower premiums. Ask your agent to give alternative deductible quotes and analyze the savings. Try to strike a balance between the likelihood that you'll experience a loss and the cost of a higher deductible. Look at how many claims you've had in the past five years. To choose what's best for you, weigh the frequency of claims and the cost reduction for various deductibles. Deductibles can range from $250 to $1000 plus per year. |
