What is a deductible?

When you are getting your car repaired or home damage fixed the deductible is the portion of the damage that you pay.  Once you have paid your deductible, your insurance pays for the rest of the damage.  For example, if you have a $500 collision deductible on your vehicle and are involved in an at-fault accident, you would pay for $500 of the damage and the insurer would pay the remaining amount to fix your car.  You can see how this is beneficial in cases of significant damage.  A low deductible means you pay very little before your insurance kicks in.  However, having a higher deductible is one way to lower your overall premium (your monthly payment).

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