A deductible (often called an excess in some markets) is the amount you agree to bear on each claim. If repair costs are 50,000 and your deductible is 5,000, the insurer considers the remaining 45,000 subject to policy limits. Higher deductibles usually mean lower premiums.
Key takeaways
- You trade a lower premium for more out of pocket cost when a claim happens.
- Small losses below the deductible are entirely yours to pay.
- Check whether the deductible applies per event, per year, or per item.
- Do not pick a deductible you could not actually pay in a bad month.