Foundations
Deductible and premium, and how they pull against each other
3 minute read
Your premium is what you pay to hold the policy. Your deductible is what you pay before coverage steps in on a claim. They tend to move in opposite directions.
A higher deductible usually means a lower premium, because you are taking on more of the first cost. A lower deductible raises the premium in exchange for a smaller out of pocket figure when something happens.
The right balance depends on what you could comfortably cover in a single event. We model a few options so the tradeoff is visible before you choose.
Key takeaways
- Premium and deductible usually move in opposite directions
- Pick a deductible you could cover in one event
- Seeing a few options side by side makes the choice clear
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