Deductible OR Excess

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Deductible OR Excess Deductible is the amount paid out of pocket by the policy holder before an insurance provider will pay any expenses. The advantage of a deductible is that it mitigates the risk. The policyholder is responsible for a portion of the costs. In effect, deductibles serve to align the interests of the insurer and the insured so that both parties seek to mitigate the risk of catastrophic loss. Property insurance has two types of deductibles: lump sum and the percentage of the insured property. -A lump-sum deductible is a specific amount, such as the $500 deductible that is common for car insurance. -A percentage deductible on the other hand is a specified percentage for example; 10% 20%, common in health insurance. Generally speaking, the larger the deductible, the less you pay in premiums for an insurance policy. One way to save money on a homeowners or auto insurance policy is to raise the deductible. Therefore, if you are shopping for insurance, ask about the options for deductibles when comparing policies. Deductibles generally apply to property damage, not to the liability portion of homeowners or auto insurance policies. For example, with a homeowners/car policy, a deductible would apply to property damaged. The amount is established by the terms of your coverage and can be found on the declarations (or front) page of your policy document (insurance contract). To decide which deductible type is best for you take into consideration this two scenarios; 1) If you are mostly healthy and don't expect to need costly medical services during the year, a plan that has a higher deductible and lower premium may be a good choice for you. 2)On the other hand, let's say you know you have a medical condition that will need care. Or you have an active family with children who play sports. A plan with a lower deductible and higher premium that pays for a greater percent of your medical costs may be better for you. Different insurance regulators strictly dictate the way deductibles are incorporated into the policy's language and how deductibles are implemented. #benewinsurance #insurtech #inclusiveinsurance #insurance #reinsurance #takaful

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