When you carry any type of insurance, the coverage may include a deductible. The deductible is the amount of money that you must pay before you are eligible for payment from your carrier. All claims have an administrative cost in addition to the amount that must be paid for damage. In the simplest claim this can run  $300-$400. By having a deductible in place, insurance companies can greatly reduce the number of “small claims,†which can quickly drain company  and force the company to raise premiums..
For example, say you backed your car into a utility pole. There are no injuries and the pole is undamaged. However, the fender on your car is now bent. If the cost to repair the fender does not exceed the deductible for your collision insurance, then you are responsible for paying for the repairs.
Deductibles vary from policy to policy. Typically, if you take on a higher deductible, you have a lower monthly payment. Because carrying a high deductible requires you to pay more out-of-pocket in case of a claim, you should carefully weigh the risks and balance between monthly premium costs and the size of your deductible. If you have questions about your deductible, contact your AIS representative.
This content is offered for educational purposes only and does not represent contractual agreements. The definitions, terms and coverages in a given policy may be different than those suggested here and such policy will be governed by the language contained therein. No warranty or appropriateness for a specific purpose is expressed or implied.
