Insurance

What Is a Deductible?

The amount you pay before a covered claim begins is only one part of the cost.

The basic trade-off

A deductible is the amount you generally pay toward a covered loss before an insurer pays its share. A policy with a higher deductible may have a lower premium, while a lower deductible may cost more to keep active.

Ask when it applies

Policies can have separate deductibles for different types of claims, and some coverages may not use a deductible at all. Read the declarations page and policy wording rather than assuming every event follows the same rule.

Choose a number you could use

The most affordable deductible is not the smallest one on the page. Consider whether your household could pay it without using high-cost debt if the covered loss happened next month.

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Priya Shah

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