01/26/2023
Tell us Thurs #1...What is an insurance deductible and why do I have to pay it?
An insurance deductible is the amount that you are required to pay out of pocket before your insurance coverage begins. For example, if you have a deductible of $500 and you have a car accident that causes $1,000 in damages, you would pay the first $500 of the damages and your insurance would cover the remaining $500.
Deductibles are a way for insurance companies to share the risk with policyholders. By requiring policyholders to pay a portion of the costs upfront, the insurance company is protected against small or minor claims, which helps to keep premiums lower for everyone. Deductibles also encourage policyholders to be more careful and considerate when it comes to the risks that they take, which can help to reduce the overall number of claims made.
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