What Is an Insurance Deductible? The insurance deductible is the amount of money you will pay in an insurance claim before the insurance coverage kicks in and the company starts paying you. When you have a deductible, you have to come up with the amount of money for your deductible before a claim gets paid in many circumstances. Once you pay your deductible the insurance company will pay you the rest of the claim value up to the policy limits and conditions in the wording. Insurance Deductible Basics In this article we will cover all the basics of a deductible, you can scroll down in the headings to find the information you are looking for, including links to other articles which cover certain questions in more detail if you need it. How Does an Insurance Deductible Work? Imagine the Deductible as Your Part of "the Deal". When you buy insurance you are protecting yourself against unforeseen financial risks that come in the form of losses or damages. By buying insurance you are asking the insurance company to "have your back" if you suffer damages that could hurt you financially. In turn, the insurance company usually says, "Sure, I'll cover you if you have a loss (claim), but will you agree to pay the first part of it by paying a deductible?" Using the example of a $500 deductible, you say, "Sure, I can afford to pay the first $500 of any loss, if you can pay the rest." They tell you how much they will charge you based on how much of the risk you're willing to cover yourself. The part of the risk you are covering is the deductible. Where Do You Find Out How Much Your Deductible Is? Your deductible should be listed as part of the terms and conditions of your contract on the declaration page of your insurance policy If you are not sure what your deductible is, or where to find it, contact your insurance company representative and ask them. You should also ask them if there are multiple deductibles for different circumstances.
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