2007-09-10 19:53:41 · 0 answers · asked by DAUGHTER OF ZION 1 in Business & Finance ➔ Insurance
You agree to a deductable when you buy insurance and the car one is a good example. You can choose usually on auto between $500, $750, $1000. So the deductable is the amount you agree to and that is the amount that the insurance company doesn't have to pay you if you have a claim. The higher the deductable and the less the insurance company has to pay you, the lower your premium (cost of the insurance) will be. I was quoted $444 for six months coverage with $500 deductable. I raised the deductable to $750 and my premium went down $60 to $384. There are deductions on property insurance too.
2007-09-10 20:08:14 · answer #1 · answered by towanda 7 · 1⤊ 0⤋
Let us say you have car insurance, having to do with damage to your car. It will pay you up to the full value of the car if you are in a bad accident, but there is a 500 dollar deductible.
the car, at the time it was wrecked was worth 13,000 dollars.
But there was a 500 deductible, so you only get 12, 500 dollars from the insurance company.
2007-09-10 19:58:48 · answer #2 · answered by nickipettis 7 · 1⤊ 0⤋
Insurance is designed to share the expense of a loss with you. That means that you pay a portion of the loss in the form of a deductible. Depending on the insurance you buy, and how much of a financial loss you can afford to cover yourself, the deductible represents that portion that you pay out of your own pocket. If your car is damaged and the cost to repair it is $1,000, and you have a $250 deductible, that means that you pay the first $250 and your insurance company pays the $750 balance. In health insurance, if you have a $1,000 annual deductible, that means that you have to pay the first $1,000 in eligible medical expenses each year before your health insurance starts to pay. Obviously, the more you can afford to pay, in the form of higher deductibles, the lower your insurance premium is going to be.
2007-09-10 23:27:42 · answer #3 · answered by Yo' Mama 4 · 3⤊ 0⤋
It's the amount out of your pocket before the insurance kicks in. If you have a $500 collision deductible, and $400 in damages, well, the insurance doesn't kick in. If you have $600 in damages, the insurance kicks in $100.
2007-09-11 10:09:13 · answer #4 · answered by Anonymous 7 · 1⤊ 0⤋