What is a policy deductible?

A policy deductible is an amount of money that a policyholder must pay out of pocket for a covered claim before the insurance company will pay out on the claim. In California, policy deductibles are generally specified in the insurance policy agreement. For example, if an insurance policy has a $500 deductible, the policyholder must pay the first $500 of an eligible claim before the insurance company will pay out the remaining cost. Deductibles tend to increase with the total amount of the coverage on the policy. Generally, the higher the policy’s coverage limit, the higher the deductible. It is important to read your policy agreement to understand the deductible requirements before filing a claim. Some insurance companies may also offer discounts if the policyholder has a higher deductible.

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What is a policy deductible?

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