This article discusses an insurance policy deductible as it relates to a claim involving your insured auto.
What is an insurance policy deductible?
A deductible is an option which may be selected by an insured if their auto policy includes physical damage coverage. If the insured has a physical damage loss which is covered by the policy, the deductible represents an amount of money the insured agrees to pay to repair damages to their auto before the insurance company has any liability for additional damage.
Many insurance companies offer several deductible options. For example, an insured may choose a $500 physical damage deductible. This means that in a covered loss, the insured will pay the first $500 to repair damages to their insured auto and only then will the insurance company consider additional payment for any damage exceeding $500. Deductibles to not apply to liability or medical coverage.
By selecting a deductible, an insured accepts responsibility for some of the cost of repairing damage in a coverage claim, up to the amount of the deductible. In return, the insurance company charges a lower premium for the coverage since they are not responsible for the entire loss amount in a covered claim. The higher the deductible selected by the insured, the lower the cost of insurance (premium).