An insurance deductible is…
An insurance deductible is the amount of money the insured will have to pay out-of-pocket for covered services before your insurance begins to cover costs.
For example, if you have a $1,500 insurance deductible on your health insurance plan, that means you have to pay the first $1,500 of your medical bills yourself before your insurance coverage begins paying for some of the costs.
Once you meet that $1,500 insurance deductible amount for the year, then your insurance carrier starts covering a percentage of the costs, based on your plan.
Most insurance deductibles reset each year. So, at the start of each new policy term, you’ll again cover all costs up to that set deductible amount before insurance begins contributing for that year.
Many types of insurance plans include an insurance deductible. Health insurance, homeowners insurance, auto insurance, and business insurance commonly have deductibles.
Choosing a higher deductible often lowers your overall premiums, but means you pay more out-of-pocket initially when you file a claim.
