8/11/2011 - What's a deductible?
A deductible is basically the amount of money that you pay after making a claim.
If your policy has a $200 deductible, for instance, that means you will pay that amount of money for any damage before the insurance company picks up the rest. So, if the estimated cost to replace or fix a damaged vehicle is $1,500, the insurance company will pay $1,300 of the total, depending on how much coverage you purchased.
While a higher deductible means you will spend more money out-of-pocket for an accident, it also means you may be paying less for premiums over the life of a policy. That's because you assume more risk. So, if you choose a policy with a high deductible, you may be charged less in monthly insurance premiums.