How to Calculate Insurance Deductibles I Desjardins Insurance

An insurance deductible on your insurance policy is the amount you pay out of pocket before your insurance company compensates you for your losses.

For example, if you were in a car accident with damages of $2,000 and your deductible is $500, you would have to pay $500 before your insurance company pays the balance of $1,500.

Reading: How to calculate insurance deductible

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Deductibles appear on all types of insurance products, such as auto insurance, home insurance, and health insurance.

what is the purpose of insurance deductibles?

Deductibles exist to help make insurance more affordable for you and the insurance company. While a deductible places some of the responsibility for expenses and losses on your shoulders, it also allows insurance companies to charge lower monthly rates for insurance. If you don’t make insurance claims often, the savings from the lower monthly rates may offset the cost of any deductibles you may need to pay.

Deductibles also prevent policyholders from making small claims that ultimately drive up the cost of insurance. If you didn’t have to pay any deductible, you may not think twice about filing insurance claims for minor scratches and dents that show up on your car. such claims incur considerable administrative and processing costs, which will eventually increase the cost of insurance.

how can you make insurance deductibles work for you?

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If you’ve agreed to pay a higher portion of your losses (in other words, a higher deductible), your insurance company will lower your monthly premium. consider this carefully. You must be sure that you will have the funds to cover the amount of your deductible in the event of an accident. Paying a higher monthly premium for adequate coverage is preferable to being without a car for months because you can’t afford your deductible. Remember that the insurance company will not pay for your losses until you pay your deductible. some things to consider:


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