A deductible is a specific amount of money that an individual or policyholder must pay out of pocket before their insurance coverage begins to pay for eligible expenses. It is a common feature in various types of insurance policies, such as health insurance, auto insurance, and home insurance.
When you have an insurance policy with a deductible, you are responsible for paying the deductible amount for covered services or damages before the insurance company starts contributing. For example, if you have a health insurance policy with a $500 deductible and you receive medical treatment that costs $1,500, you would need to pay the first $500 yourself, and then the insurance company would cover the remaining $1,000 according to the terms of your policy.
Deductibles are designed to share the financial responsibility between the insured individual and the insurance company. Typically, policies with higher deductibles have lower premiums (the regular payments you make for insurance coverage), while policies with lower deductibles tend to have higher premiums.
It’s important to note that deductibles are usually set on an annual basis, meaning they reset each year. So, if you’ve already met your deductible for the year and need additional covered services, you may not have to pay the deductible again until the next policy year begins.
It’s recommended to review your insurance policy or consult with your insurance provider to understand the specific details of your deductible and how it applies to your coverage.