05/27/2026
Pro Insurance Insight of the Week: Deductibles 101
Deductibles… ahhh yes, exciting stuff!!
By definition, a deductible is the amount you pay out of pocket before your insurance policy starts paying.
One thing a lot of people don’t realize:
Deductibles on your P&C policies (auto/home) work differently than health insurance.
With auto and home insurance, your deductible applies per claim/accident, not annually.
Example: You have a $500 collision deductible on your vehicle.
You’re on your phone, run a red light, and hit someone. Your vehicle has $6,000 in damage.
You pay the first $500, and your insurance company covers the remaining $5,500 (assuming it’s repairable and covered).
Here’s the important part:
• Lower deductible = higher monthly premium/payment
• Higher deductible = lower monthly premium/payment
Why?
Because insurance is all about risk.
The more risk you’re willing to take on yourself, the lower your insurance company will price your policy.
Every single day, I talk with people who have deductibles that don’t match their financial situation.
There’s usually a “sweet spot” depending on:
• Your savings
• Your income
• Your vehicle/home value
• Your comfort level with risk
A lot of people are either:
• Paying way too much for low deductibles they don’t need
OR
• Carrying deductibles so high that they’d struggle to pay them after a loss (defeats the purpose of having insurance!)
If you’re not sure where your deductibles should be, let’s talk.
317-374-1681 or shoot me a message 🫡
