Deductible

Deductible A provision in a disability insurance policy that an initial amount of expenses shall be paid by the policyholder before the l insurance coverage begins, i.e insurer will step in and pay the remaining balance of a claim with definition of claim (up to the limit in your policy). For example, if you have a deductible of $1,000 and you have an auto accident that costs $4,000 to repair your car. You will have to pay $1,000 out of pocket as your deductible, and then your insurance would cover the additional $3,000 (or up to your coverage limit). Your insurance company would then likely send you a check for the amount of the claim minus your deductible. The general rule is that policies with higher premiums come with lower deductibles while those with lower premiums tend to have higher deductibles. Insurance companies use deductibles to ensure policyholders have skin in the game and will share the cost of any claims. When you file a claim with your insurance company, you will first need to pay your deductible. Once you have paid your deductible, your insurance company will start to pay for the covered expenses, up to the limits of your policy. Deductibles cushion against financial stress caused by catastrophic loss or an accumulation of small losses all at once for an insurer. Deductible is very common in health insurance where clients have to meet health insurance deductibles and may also be required for other costs like copays and coinsurance, depending on their plans. " example the policy term says you have up to 80% cover. In this case you will cover 20% as deductible. #benewinsurance #insurtech #inclusiveinsurance #insurance #reinsurance #takaful