Deductibles have been an essential part of the insurance contract for many years. Understanding the role deductibles play when insuring a car or home is an important part of getting the most out of your insurance policy.

DEDUCTIBLE DEFINED

A deductible is an amount of money that you yourself are responsible for paying toward an insured loss. When a disaster strikes your home or you have a car accident, the amount of the deductible is subtracted, or “deducted,” from your claim payment.

Deductibles are the way in which a risk is shared between you, the policyholder, and your insurer. Generally speaking, the larger the deductible, the less you pay in premiums for an insurance policy.

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