Deductible
Amount you must pay before you begin receiving any benefits from your insurance company
A deductible is a specific amount of money that an insurance policyholder must pay out of their own pocket before their insurance coverage kicks in. In other words, it is the cost that the insured must pay before the insurance provider assumes responsibility for any costs related to a covered incident or claim. Deductibles are typically found in insurance policies related to auto, homeowners, health, and other types of insurance.
For example, if a homeowner has a $500 deductible on their home insurance policy, and they file a claim for damages that will cost $5,000 to repair, they would be responsible for paying the initial $500 out of their own money before their insurance company would cover the remaining $4,500 of the total cost.
It’s important to note that the amount of the deductible can vary depending on the type of insurance policy you have, and higher deductibles typically result in lower monthly or annual premiums. Therefore, when selecting an insurance policy, it is important to carefully consider the relative costs and benefits of different deductible levels.
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