What is an insurance deductible?

An insurance deductible is an amount of money that an insured person must pay before the insurance company will cover the remaining costs of a claim. Deductibles are usually set amounts and typically range from a few hundred to several thousand dollars. In Tennessee, the insurance deductible for a standard home, auto, or business policy can vary by the type of policy and the insurer. For example, a homeowner might have a $1,000 deductible for their home insurance policy. This means they must pay the first $1,000 of any claim and the insurance company will cover anything above that amount. Likewise, a business owner might have a $2,000 deductible for their business policy. In this case, the owner must pay the first $2,000 of any claim and the insurance company will cover the remainder. Insurance deductibles are intended to lessen the burden of the insurance company by only covering the cost of claims after the insured person has paid a certain amount. Generally, the higher the deductible, the lower the monthly cost of an insurance policy will be. On the flip side, the lower the deductible, the higher the premium, or monthly cost, of the policy will be.

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What is an insurance deductible?

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