What is the difference between the premium and the deductible?

The premium is the amount of money the insured pays for an insurance policy. This money is typically paid in monthly payments and the cost of the premium is based on the type of policy, the amount of coverage, and the individual’s age. The deductible is the amount of money that the insured is responsible for paying out of pocket before the insurance company covers expenses. The higher the deductible is, the lower the premium will be. In Texas, premiums are regulated and must adhere to the laws set forth by the Texas Department of Insurance. The minimum deductible for insurance policies in Texas is $500. Any deductible amount over $500 must be disclosed to the insured prior to the policy being purchased. If the insured chooses to increase their deductible, they must be informed of the increased cost of the premium and the decrease in coverage. This is important to understand as it could significantly change the overall cost of an insurance policy.

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What is the difference between the premium and the deductible?

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