{"id":352624,"date":"2017-07-17T18:33:56","date_gmt":"2017-07-17T23:33:56","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-law\/consumer\/insurance\/what-is-an-insurance-deductible.html"},"modified":"2024-01-06T17:52:56","modified_gmt":"2024-01-06T22:52:56","slug":"what-is-an-insurance-deductible","status":"publish","type":"page","link":"https:\/\/www.findlaw.com\/consumer\/insurance\/what-is-an-insurance-deductible.html","title":{"rendered":"What Is an Insurance Deductible?"},"content":{"rendered":"\n
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What Is an Insurance Deductible?<\/h1>\n
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\n By FindLaw Staff<\/a> | Legally reviewed by Melissa Bender, Esq.<\/a>\n | Last reviewed\n
\n \n <\/i>\n Legally Reviewed\n <\/summary>\n\n
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This article has been written and reviewed for legal accuracy, clarity, and style by FindLaw\u2019s team of legal writers and attorneys<\/a> and in accordance with our editorial standards<\/a>.<\/em><\/p>\n\n <\/div>\n <\/details>\n\n

\n \n <\/i>\n Fact-Checked\n <\/summary>\n\n
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The last updated date refers to the last time this article was reviewed by FindLaw or one of our contributing authors<\/a>. We make every effort to keep our articles updated. For information regarding a specific legal issue affecting you, please contact an attorney in your area<\/a>.<\/em><\/p>\n\n <\/div>\n <\/details>\n<\/section>\n

A deductible is the amount the insured must pay out of pocket before their insurance policy starts paying. The insurer pays for expenses covered by the policy after the policyholder pays the premium. Insurance deductibles play an essential role in the insurance claims process.<\/p>\r\n

Knowing what different insurance terms mean in a given plan can be difficult when you purchase insurance<\/a>. Whether looking at health insurance to cover your health care expenses or a homeowners policy, you’ll need to become familiar with key terms like insurance deductibles<\/a> and premiums<\/a>.<\/p>\r\n

This basic knowledge about your insurance coverage options will help you make informed decisions. You can use this information to understand the total costs of your insurance and out-of-pocket maximums. This knowledge could help you save money and avoid insurance scams like premium diversion<\/a>.<\/p>\r\n

You can learn about particular benefits and what kind of plan you can afford based on out-of-pocket costs and other vital considerations.<\/p>\r\n

A reputable insurance agent can also help explain the types of deductibles based on your insurance needs. They can also provide an insurance quote based on factors most important for you \u2014 a low deductible, lower premium, or other considerations.<\/p>\r\n

Learn more about insurance deductibles and their role in setting insurance premiums in this article.<\/p>\r\n

Insurance Deductible Defined<\/h2>\r\n

Insurance costs play a central role in responsible financial planning for all but a few individuals possessing endless financial resources. Thus, knowing how deductibles work and the dollar amount required for an insurance deductible is critical.<\/p>\r\n

Definition of Insurance Deductible<\/h3>\r\n

A deductible is the amount of money you, the policyholder, must pay for services or benefits covered by your insurance policy<\/a>. Once you pay the agreed minimum deductible, your insurance company will help pay for services.<\/p>\r\n

Each type of policy comes with separate deductibles. Once you’ve paid the deductible, your insurer pays for covered services up to the plan limit. However, insurance might cover some benefits outside of the deductible amount. The deductible and out-of-pocket expenses may apply annually or per incident, depending on your policy.<\/p>\r\n

Examples of How Insurance Deductibles Work<\/h3>\r\n

Suppose you have a car insurance plan<\/a> covering damage to your car. Your policy specifies an $800 deductible per claim. If you’re in an accident resulting in $1,000 worth of damage, you will pay for the first $800 worth of repairs. Your insurance company will cover the remaining $200.<\/p>\r\n

Similarly, your dental plan<\/a> has a $200 annual deductible, but your first dental visit is a routine check-up. That visit may be covered entirely, regardless of the deductible. Your dental policy covers yearly check-ups. You incur no out-of-pocket costs for the routine check-up.<\/p>\r\n

Your next two dental visits are for services that trigger your deductible under the terms of the policy. If these visits cost $190, you’ll pay the total costs for both visits in full. But your insurance will help pay for subsequent visits within the same plan year.<\/p>\r\n

Types of Insurance Deductibles<\/h2>\r\n

There are many types of insurance<\/a>, including:<\/p>\r\n