What is the difference between the premium and the deductible?

The premium is the amount of money that must be paid in order to have an insurance policy. It is the fee that is paid to obtain coverage. The premium typically includes taxes, fees, and other administrative costs. The deductible is the amount of money that must be paid out-of-pocket before the insurance policy kicks in and covers the difference between what is owed and the amount of loss. The deductible is typically set by the insurance company and is specific to the individual policy. In Louisiana, insurance regulation law states that deductibles must be reasonable and appear clearly on the insurance policy. This means that the deductible must be appropriate for the level of coverage and should not unreasonably reduce the amount of coverage that the policy provides. In short, the premium is the amount of money paid to get an insurance policy and the deductible is the amount of money that must be paid out-of-pocket first before the insurance policy will cover the rest of the loss. The amount of the deductible should be reasonable and should be clearly indicated on the policy.

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What is the difference between the premium and the deductible?

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