What is a deductible?
The amount a member must pay for covered services over a specified period of time before benefits will be paid. For example, if a members plan indicates that there is a $250 deductible, that amount must be paid out-of-pocket for covered services before benefits will be paid by the insurance carrier.
• Ans: A deductible is an amount that you agree to be responsible for in the event of a loss under the physical damage (collision or comprehensive) coverages of your policy. Deductibles are offered on some coverages to give insureds flexibility in the cost of insurance and the amounts they wish to be responsible for. You may reduce your auto insurance costs by raising the deductibles on physical damage coverages. You should review the amount of the deductibles you now carry on these coverages to determine whether it makes sense for you to absorb a larger portion of your loss in the event of an accident, in return for a lower premium charge. Under the law, your insurer is required to furnish you with information about how much you may save by adjusting your deductibles.
It’s the amount deducted from the payment to you before your policy kicks in. For instance, if you have an auto insurance policy with a $200 collision deductible, the first $200 to repair the damage to your car will be deducted from the payment you receive from your policy. If repairs only cost $150, you will be responsible for the payment. But if your covered repairs cost $1,000, $200 will be deducted and your insurance will pay $800.
