What is a Deductible and how does it Work?

 When you purchase a MA car insurance or MA homeowners insurance policy, you'll be given a choice of what deductible amount you want to carry.    So.. what exactly is a deductible and how does it work?  Let's break it down:
What is a car insurance deductible?  The deductible is the amount that you will absorb to fix the damage to your car if you are in a collision that is YOUR fault. Having a deductible reduces your premium.  The higher the deductible, the less your premium is.  A standard MA car insurance deductible is $500 but often times people go with a $1,000 deductible to reduce their premium even more. 
What is a homeowners insurance deductible?   A MA homeowners insurance deductible again is the amount you will absorb in the event of damage to your home.  A standard MA deductible is $500 or $1,000 but a higher deductible can be purchased.  The higher the deductible, the less your premium.

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How does a car insurance deductible work?  If you are involved in a collision that is YOUR fault, this is the amount that you will pay first to fix the damage to your car.  For example, it the collision results in $1500 worth of damage to your car and you have a $500 deductible, the insurance company will pay out $1,000 to you ($1500 minus your $500 deductible).  There is NO deductible if the collision is NOT your fault.  The other party's insurance company will pay out the damage to you 100%.  There is also NO deductible for any liability portion of a car insurance claim (for example, any medical payments that your insurance company pays out to the other party).  If it's a very minor collision (that you caused) and only results in $300 worth of damage to your car, the insurance company will not pay anything because you have to meet your $500 deductible first.  The deductible also comes into play for a comprehensive claim.  Comprehensive coverage covers damage to your vehicle caused by fire, theft, vandalism, falling objects, water, flood, explosion, earthquake, windstorm, hail, riot or contact with a bird or animal.  It also covers glass damage.  Typically your deductible is the same for comprehensive as what it is for collision - usually $500 or $1,000.   The good news is that in Massachusetts, you don't have to have a glass deductible.  So, as long as you carry comprehensive coverage, you can fix or replace your windshield at no extra cost ( no deductible)!
How does a homeowners insurance deductible work?  A homeowners insurance deductible works the same way as a car insurance deductible.  Let's say your roof leaks and causes $2500 worth of damage to your walls and carpet.  You have a $500 deductible.  The insurance company will pay out $2,000 ($2500 minus your $500 deductible).  There are other factors that can determine exactly how much will be paid out but generally, this is how it works.  Again, there is NO deductible for a liability claim.  For instance, if your neighbor trips on your property and decides to sue you.

We hope this has helped you understand more about MA car insurance and MA homeowners insurance deductibles.  It can be very confusing!  We're always here to help and to educate our clients so please contact us at (978) 562-3464 if we can be of assistance to you.  Or reach out to us on our website:  www.tesearsinsurance.com.

Thomas E. Sears Insurance Agency, Inc.

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