A Deductible is a term that may refer to the amount of money a policyholder must pay out of pocket before their insurance coverage kicks in. The deductible is an agreed-upon amount that the policyholder must pay before the insurance company will cover the remaining expenses.
Deductible in More Detail
The deductible amount is typically specified in the policy, and can vary depending on the type of coverage. For example, a health insurance policy may have a deductible of $1000, while a car insurance policy may have a deductible of $250.
The deductible amount is subtracted from the total amount of the claim, and the remaining balance is then covered by the insurance company. For instance, if you have a $1000 deductible on a health insurance policy and you have a $3000 medical bill, you would pay the first $1000 yourself and the insurance company would cover the remaining $2000.
The deductible is an important part of any insurance policy and understanding how it works is essential to having a good grasp of insurance coverage. By understanding how the deductible works, you can make informed decisions about which policies are best for you.
