Basic idea
A deductible is your share of a covered loss before insurance pays. Higher deductibles usually mean lower premiums because you retain more risk.
Deductibles can be flat dollar amounts or percentages of insured value for certain perils like wind or earthquake.
Per claim vs annual
Home and auto policies often apply deductibles per claim. Two hail claims in one year can mean two deductibles.
Health plans use annual deductibles that accumulate across eligible services until out-of-pocket max is reached.
Choosing a level
Pick a deductible you could pay tomorrow without borrowing. Emergency funds should cover at least one home and one auto deductible combined.
Small claims near deductible size may be worth paying yourself to avoid premium hikes at renewal.
Special deductibles
Hurricane, wind, hail, and earthquake deductibles may differ from the standard amount. Read declarations carefully in high-risk regions.
Zero-deductible glass cover or disappearing deductibles are marketing perks. Weigh their cost in premium against realistic claim frequency.
FAQs
Do deductibles apply to liability claims?
Liability coverage usually has no deductible. Property damage sections of auto policies do apply deductibles on your vehicle repairs.
Can I change deductible mid-term?
Many insurers allow mid-policy changes to deductibles with a premium adjustment. Confirm effective date before you raise or lower it.
Who pays deductible in a not-at-fault crash?
You may pay collision deductible upfront and seek recovery from the other insurer if they accept fault. Subrogation returns your deductible when successful.
General information only. Not financial, tax, insurance or credit advice.