What’s the Difference Between a Premium and Deductible?
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I had a question the other day about what’s the difference between a premium and a deductible? The premium is what you pay to the insurance company for your insurance. The deductible is what you pay if you have a loss, say you have a car accident and you have a $500 deductible on your collision, you have to pay the first $500, then the insurance company will pay the difference.
Same with on a homeowner’s, you have a deductible. And depending on your company, some have just a regular deductible, then some have a wind and hail deductible. So let’s say you have hail that hits your house and you got to get a new roof, you have to pay the deductible, say, $1,500. Then the insurance company will pay the difference. But the deductible is usually you have to pay first before the insurance company will pay anything.
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