In the world of insurance there are a few deductibles you will want to be familiar with (and probably are). Let's review the basics of what a deductible is, and how it relates to your health, vehicles, and home.
What is a deductible?
Simply put, it is your financial responsibility -- your "out-of-pocket" good faith money -- before your insurance company picks up the tab. Usually there is a choice on the limit. While electing a higher deductible may reduce your premiums -- keep in mind this means more out-of-pocket when you need to use your insurance coverage. Most often you can select the deductible limit you want.
Health
If you are one of the 92% of Americans who have health insurance, you have probably experienced paying towards fulfilling your deductible limit.
This may be confused as "paying in installments," as this means each year, you are paying your own medical bills out of your own pocket until you meet your set medical deductible limit.
Once your medical deductible limit is met 100%, then your insurance company starts paying your medical bills, depending on the plan you, your family or your employer has selected.
For example, if your group insurance deductible is $5000 -- you are responsible for paying out of pocket for your medical bills and treatment up to $5000. Once your deductible is met in full, then any medical bills above that amount, your insurance company should pay. (The deductible is not the same as co-insurance and co-payments responsibilities.)
Every year, you start over at ground zero.
Hull, Two and Four Wheels
Own a boat, motorcycle, automobile, recreational vehicle, ATV, off-road vehicle, or golf cart and want protection from damage to it, you will be subject to a deductible.
The most common deductibles available to choose from are: $500, $1000, or $1500. This is a set amount you promise to pay before your insurance company picks up the tab.
If a claim situation occurs, the insurance company will subtract your deductible from your claim adjuster's payment to the body shop or repair shop. You will then be responsible for paying the body shop or repair shop your portion.
There are no installment options; the deductible amount is required in full.
Here are the most common coverages which have a deductible:
- Comprehensive and Collision. (Depending on the state the accident occured, you may not be required to pay a deductible for only glass breakage; however, if there is bodily damage to your vehicle from a collision in addition to glass breakage, you would be subject to paying your deductible. Note: If your vehicle is involved in two accidents in the same day, you will be subject to pay two deductibles.)
- Uninsured Motorists Property Damage. (In some states, after a hit-and-run incident, while the claims investigation is on-going to determine the identity of the at-fault person and if they have insurance, you may be able to use this coverage. The deductible you may be required to pay varies per state; in SC it can be as low as $200. The limits of coverage available to you would be the same as your liability limits to others.)
- Underinsured Motorists Property Damage. (This coverage is not available in all states, and/or it may be combined with Uninsured Motorists coverage. Like Uninsured Motorists, the deductible you may be required to pay varies per state; in SC it can be as low as $200. The limits of coverage available to you would be the same as your liability limits to others.)
Home Sweet Home
Yes, even your home requires a deductible, with the most common ones starting at $1000. It works the same -- if your house is completely damaged or partially damaged, the insurance company will subtract your selected deductible limit from the insurance company pay out.
One thing to note, in addition to your regular home deductible, you may be subject to other deductibles if you carry wind and hail insurance coverage (usually coastal), earthquake insurance, and/or flood insurance.
Talk With An Agent
When you have questions about your home insurance, vehicle insurance or health insurance, request a virtual or in-person consultation with one of our knowledgeable team or talk with your insurance agent.
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"Can I pay my deductible in installments?"
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