What is a deductible?
If you’re about to make a claim, it’s important to know your deductible and what that means to your insurance coverage.
How much income do I need to qualify for a mortgage in Canada?
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A deductible is the amount you pay before receiving any insurance benefits. Only certain types of policies in Canada, such as auto collision insurance and home owner’s insurance, have deductibles. When making a claim, you must pay the deductible amount before the insurance company pays for the coverage. For example, if you are in a car accident and your policy has a deductible of $500, you pay the first $500 of the repair costs and your insurance company will pay additional costs up to the limit stated in the policy.
You can also use the amount of a deductible to affect the cost of your monthly premiums. A general rule of thumb: The higher the deductible, the lower the premium.
Example: “When Sanjay bought a Ferrari, he asked his insurance agent if he could reduce his insurance costs by accepting a higher deductible.”
Read more about insurance:
- Everything you need to know about your car insurance deductible
We look at what an auto insurance deductible is, how it affects your insurance premiums and how to choose the best one for you. - How to find affordable home insurance
Home insurance may seem like just another bill to pay, but it’s essential for protecting what is likely your most valuable asset. Getting a good rate starts with doing your research and understanding how insurers evaluate risk. - Before you buy, here’s how to compare home insurance
Comparing home insurance quotes is key to getting the right coverage at a good rate. We asked an expert what to look for when shopping around. - What is tenant insurance?
Tenant insurance is coverage that protects you and your personal items if you rent your home. Industry pros explain how it works and offer answers to your questions. - A guide to cottage insurance
Cottage insurance is a must-have for your home away from home. Here’s what you need to know about the types of coverage, renting out your cottage and more.
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