What is a insurance deductible

What is a insurance deductible

An insurance deductible is defined as the out-of-pocket amount you're required to pay toward a covered claim. Depending on the policy type — homeowners, renters, auto, or health — you may have to pay more than one deductible. You typically get to choose your deductible amount when you purchase the policy. Selecting a higher deductible can reduce your rate and selecting a lower deductible can reduce the out-of-pocket amount you pay when you file a claim.

How do deductibles work?

When shopping for insurance, you'll find that deductible amounts vary from policy to policy. There's a correlation between the deductible and your insurance rate. If you have a higher deductible, your premiums will be lower. Conversely, with a lower deductible, you can expect your premiums to be higher.

Important note: When and how a deductible applies can vary based on the type of policy. Learn more in the section below on the different types of deductibles.

What to consider before choosing an insurance deductible
When selecting insurance, you have the option of choosing a lower or higher deductible. Each has its positives and negatives, so consider these factors before making a final decision:
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