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Do you understand your deductibles?

Before your insurance pays, you pay

Your deductible is an amount that you typically pay out of pocket each year before your insurance policy covers your expenses or losses. Plans with lower deductibles typically charge higher premiums and vice versa. 

Although some types of insurance, including auto and property insurance, may not pay anything until you meet your deductible, health insurance typically covers some costs of routine care before your deductible is met. 

Once you've met your deductible, your plan generally covers remaining expenses or losses up to some maximum amount. Some plans may require you to pay coinsurance or a percentage of remaining costs even after you meet your deductible.

A deductible is an amount that you generally must pay in addition to your premiums before your insurance company will pay toward your claims. How your deductibles work may vary among the types of insurance you own, so it’s important to understand each policy individually.

Key Takeaways:

  • Every calendar year you generally must meet your deductible before your insurance will pay toward covered expenses or losses.
  • With most types of insurance, including auto and property insurance, you generally won’t meet your deductible until you submit a claim. At that point, you must pay your full deductible toward covered expenses or losses before your insurer pays anything.
  • Health insurance policies, however, typically cover some of your costs before you meet your deductible. You may meet your health insurance deductible gradually over the year.
  • Not all expenses count toward your deductible, and even after meeting it, you may be required to pay coinsurance.
  • It’s important to understand the terms of all your insurance policies, including what your deductible is and what expenses or losses count toward it.

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