If you are new to insurance and new to the terminology, you may not know what a deductible is. The deductible is the amount you have agreed to pay out-of-pocket towards your claim before your insurance begins to pay.<\/p>\n
For example, let’s say that you are involved in an accident and the damages to your car are estimated at $1,500. If your deductible is $500, you will pay the first $500, and your insurance company will pay the remaining $1,000 to get your car repaired. But if the damages are less than $500, then you will pay for all of the repairs because it is less than the amount of your set deductible.<\/p>\n
In addition to understanding what a deductible is, it is important to know that your deductible can have an impact on your insurance premiums. A lower deductible means you will pay less if you are in an accident. Your insurance company will be covering more of the repair costs. Because of this, a lower deductible will result in a higher premium. If you increase your deductible, it will usually lower your premiums.<\/p>\n