Deductible
The amount you pay out of pocket on a claim before your insurance starts paying.
A deductible is the dollar amount you absorb yourself when you file a claim, before your insurance carrier pays the rest. Higher deductibles lower your premium; lower deductibles raise it. Most people don't think about their deductible until they have a claim — at which point it's the difference between filing or paying out of pocket.
For auto insurance, you typically have separate deductibles for collision and comprehensive coverage. For homeowners, you usually have one all-perils deductible plus a separate higher deductible for wind/hail in many Midwest states (including Illinois, Indiana, and Wisconsin). Hurricane and earthquake deductibles, where applicable, are often percentage-based rather than flat-dollar.
Choosing the right deductible is a personal cash-flow decision. The math: if raising your deductible from $500 to $1,000 saves you $200/year, that change "pays for itself" in 2.5 years if you don't file a claim. If you have $1,000 in emergency savings and file claims rarely, the higher deductible usually wins.
Related terms:Premium·Claim·Coverage
Related Geneva services:Home Insurance·Auto Insurance