There’s a lot of jargon in the insurance industry, but a term you may see more often than others is “deductible.” While you’ve probably seen this term used among various forms of insurance, here’s a guide to help you better understand auto and home insurance deductibles.
What is an insurance deductible?
An insurance deductible is the amount you pay out-of-pocket before your insurance coverage kicks in. Most often, your deductible is in the form of a dollar amount, but it can also be in the form of a percentage of a total coverage amount. Generally, you are required to pay your full deductible amount before your insurance company will pay the rest of the claim value up to the policy limit.
Auto Insurance Deductibles
Auto insurance deductibles are similar to other insurance deductibles, but not all forms of auto insurance coverages require a deductible amount. While comprehensive and collision coverage usually require a deductible, liability coverage does not. The higher your deductible, the lower the monthly premiums.
Home Insurance Deductibles
A home insurance deductible is the amount you are responsible to pay before your insurance carrier will pay for the insured loss. The amount you pay each month for homeowners insurance is directly correlated to the amount in which you set your deductible. Similar to a car insurance deductible, a higher deductible means lower monthly payments, but it also means you’ll have to pay more out-of-pocket when you file a claim.
How to Choose the Right Amount for Your Insurance Deductible
When deciding on your deductible amount, you’ll want to think about how much you can afford in monthly payments and how much you can afford to pay out-of-pocket if you were to get in a car accident or if your home is damaged.
Let SelectQuote Shop and Find the Right Insurance Deductible for You
Your deductible amount is one of many decisions you’ll have to make when choosing your auto insurance and homeowners insurance. You know yourself and your situation better than anyone, and by working with SelectQuote, you’ll have help through the entire buying process and we can answer any big or little questions you have along the way. We’ll help you find the right home and auto insurance policies for your needs.