The insurance deductible is the amount of money you will pay in an insurance claim before the insurance coverage kicks in and the company starts paying you. By buying insurance you are asking the insurance company to “have your back” if you suffer damages that could hurt you financially. In turn, the insurance company usually says, “Sure, I’ll cover you if you have a loss (claim), but will you agree to pay the first part of it by paying a deductible?”
Using your Deductible to Save Money
Increasing your deductible could save on your insurance premiums. Even though you pay more in the event of a claim when you have a higher deductible, the reality is that people do not have claims every year. So every year you do not have a claim and took a higher deductible, you could be saving as much as 20% or 30% on your insurance costs.