Learn, Policy basics
Deductible
What an insurance deductible is, how choosing a higher or lower deductible changes your premium, and how the deductible is applied when you file a claim.
A deductible is the amount you agree to pay out of pocket on a covered claim before the insurance company pays the rest (up to policy limits).
If your deductible is $1,000 and a covered claim is $5,000, you typically pay $1,000 and the insurer pays $4,000 (subject to policy terms). Higher deductibles often mean lower premiums; lower deductibles mean the insurer steps in sooner.
The right deductible depends on your cash reserves and how often you expect to claim — not a one-size slogan.