Deductible (Insurance & Financial Protection) - Definition, Examples, Advice | Bolder Money

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Definition

The amount you pay out-of-pocket for an insurance claim before your coverage kicks in. Lower deductibles mean higher premiums, and vice versa.

What to consider

Choose a deductible that you can comfortably afford in an emergency.
Higher deductibles might lower premiums but require more out-of-pocket cash.
Plan ahead for the potential expense if you need to file a claim.

Real world scenarios

Kendra lowers her auto insurance premium by opting for a higher deductible, acknowledging she’ll pay more upfront if she files a claim.
A small fender-bender leads Brian to pay out of pocket since the repair cost is below his deductible. He avoids an insurance claim altogether.
Comparing health plans, Mia balances premium savings with potential deductible expenses if she needs extensive care.

Related terms

Insurance & Financial Protection

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