What Is an Insurance Deductible?
A deductible is used by insurance companies as a method of making sure customers absorb part of the risk of being insured. You can adjust your deductible up or down if you want to alter your insurance policy.
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Deductibles
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A deductible is paid by someone who has an insurance policy on an automobile, a home or some other type of insurance policy. If you file a claim, you must pay your deductible before the insurance company will pay the remaining balance on your claim.
Smaller Premium, Higher Deductible
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If you increase the amount of your deductible, your monthly premiums will decrease. But when you file a claim, you should be prepared to pay a higher deductible.
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Claims
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If you have an accident, the damages total $240 and your deductible is $250, you may want to have the repairs done yourself without filing a claim. The insurance company will pay nothing in this situation. Filing a claim could increase your premiums later on.
Risk Level
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When you have a higher deductible, you are absorbing more of the risk when it comes to being insured. A lower deductible places more of the risk on the insurance company.
Lower Deductible
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If you are thinking about lowering your deductible, you may want to look at other avenues for lowering the monthly premiums on your car. Certain safety features can lower your premiums. Taking a driving course can lower your premiums in some cases.
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