As the owner of any insurance policy, you’ve no doubt come across the commonly used term ‘deductible.’ But how much do you understand about what the term means?
In simple terms, a deductible is the amount of money that you, the insured, must pay for a claim before your insurance will kick in.
If your insurance policy has a deductible, you will be responsible for any losses and/or payment of services up to a certain amount as stated in your insurance policy.
How is a deductible beneficial?
A deductible isn’t only beneficial to your insurance company, it’s beneficial to you as a policy holder, too! As a policy holder, it can be a way to lower the cost of your insurance: The more risk for loss that you agree to pay before your insurance kicks in, the lower the chance for your premium to be.
Look at it this way: You are unfortunate enough to be in a car accident and your car’s damages are assessed at SCR15,000 in damages. If your insurance policy has a SCR5,000 deductible, you will have to pay the first SCR5,000 of the damages to your car out of your own pocket and your insurance will pay the remaining SCR10,000. Generally, once the deductible is met, any future losses that you might have during the term of that policy will be covered in full.
Talk to one of our insurance agent about what deductible options are available to you, and how they will affect the cost of your coverage. Call us on 429 5000 or send an email to email@example.com and an officer will get back to you.