In car insurance, a deductible is the amount of money that a policyholder must pay out of pocket before their insurance coverage kicks in to cover the rest of the claim
. For example, if a policyholder has a $500 deductible and they get into an accident that causes $3,000 in damage to their car, they would pay $500 out of pocket and their insurance company would cover the remaining $2,500
. Car insurance policies may have multiple deductibles for different types of coverage, such as comprehensive and collision coverage
. The deductible amount can vary depending on the policy and the insurer, and policyholders can typically choose the deductible amount that works best for them
. A higher deductible usually means a lower premium, while a lower deductible usually means a higher premium
