Deductibles Demystified: What They Are and How They Work

Deductibles are foundational in the insurance world, yet they're often misunderstood. In essence, they act as a financial buffer, representing your share in a potential loss.

The Mechanics of Deductibles:

1. How It Works: If you have a $500 deductible and a $2000 claim, you'll pay the first $500, and the insurance will cover the remaining $1500.
2. Types of Deductibles: Some policies offer per-event deductibles, while others might have annual deductibles, especially common in health insurance.

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Pros & Cons:

• Pro: Higher deductibles can lower your premium.
• Con: In the event of a claim, you'll have a higher out-of-pocket expense.

Deductibles play a significant role in shaping your insurance experience. Striking the right balance ensures that you're financially protected without overburdening yourself.