Deductibles

A deductible is the amount you must pay out of pocket before your insurance starts to cover costs. For example, if you have a $1,000 deductible and you incur $3,000 in expenses, you will pay the first $1,000 yourself. After that, your insurance would begin to pay, based on the terms of your policy. Deductibles can vary by plan and apply to different types of insurance, including health, auto, and homeowners insurance. Choosing a higher deductible often results in lower premiums, while a lower deductible means higher premiums but less out-of-pocket expense when you file a claim.