What is a deductible and how does it work?
A deductible is the cash you must part with for each claim. The auto insurance carrier picks up whatever your deductible doesn’t cover. Deductible applies only to comprehensive and collision coverage, which means it applies to damage to your vehicle. There is no deductible for damage to another vehicle or for injuries.
A deductible is the amount you will pay out of pocket when a claim is filed for a breakdown or failure of a covered component. You pay only one deductible per repair visit not per component, regardless of how many parts need repair. Your deductible is determined at time of service contract purchase.
The “deductible” represents your cost for vehicle repairs. For example, if you have a $500.00 deductible and your vehicle requires $1,500.00 in repairs, you will have to pay the first $500.00 and the provider of your vehicle service contract will pay the remaining $1000.00. If your deductible were $250.00, the provider would pay $1250.00 and you would pay $250.00. A “zero deductible” means that all repair costs will be paid by the contract provider and the contract owner will pay nothing.
