Current Events > what is a deductible (insurance)

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so I'm confused. in a deductible, lets say its $1000, what does that mean? that I pay up to $1000 then insurance covers anything higher, or that insurance pays up to $1000 and then I pay anything higher

makes no sense. I'm trying to change my car policy because it's increasing by $250 for some reason for the next 6 month policy period even tho I've never been in an accident and have been driving for 15 years.

You'd pay the first 1k, them the rest.

Deductible is what you pay for a claim.

Premium is what you pay them for insurance coverage.

Generally you can opt for a smaller or higher deductible but that will inversely affect your premium.

If you have a $1000 deductible and do $1300 damage to your car, the insurance company will pay for 300 of it. If you have 700 damage, they pay nothing. The insurance company pays for everything AFTER the deductible.

Premium is how much you pay monthly to be covered.
Deductible is the point where they start covering everything afterwards, usually resets every year.

Or if we get into prescription insurance deductibles, things get more complicated depending on whether youre talking about Medicare or not.

Medicare Prescription insurance pays nothing until your deductible is hit, then it pays most of the cost after that. But after a while, you enter the donut hole and they stop paying again. But then after a little while longer they DO start paying again. Then it resets on the first of the year.

In some places it's called "excess".

so confusing. then there is standard, limited, or broad coverage. which makes no sense, cus they're all about "if you're less than 50% at fault, blah blah"

but michigan is no-fault...so wouldn't i technically always be less than 50% at fault?

BroodRyu posted...

Or if we get into prescription insurance deductibles, things get more complicated depending on whether youre talking about Medicare or not.

Medicare Prescription insurance pays nothing until your deductible is hit, then it pays most of the cost after that. But after a while, you enter the donut hole and they stop paying again. But then after a little while longer they DO start paying again. Then it resets on the first of the year.

I thought the ACA got rid of the donut hole.

It's basically a way for them to get out of having to pay out for minor damages/claims.

a higher deductible means a lower monthly/overall policy cost, however that also means you need to keep enough money to cover your deductible at all times if you don't want to be fucked in the event something happens.

BucketCat posted...

but michigan is no-fault...so wouldn't i technically always be less than 50% at fault?

"No-fault" means that when you're injured in/by a vehicle, you use the PIP coverage on your car insurance first to pay your medical bills resulting from the accident. It has nothing to do with who is responsible for the accident.

Biggest scam of US insurance. Imagine paying EXTRA, before getting benefits you pay for monthly.

Tyranthraxus posted...

I thought the ACA got rid of the donut hole.

Not quite yet. Unless it happened just this year.

BroodRyu posted...

Not quite yet. Unless it happened just this year.

Looks like it changed last year from 0% coverage to 75% coverage. The "location" of the hole also moved slightly. It's a tremendous improvement. I'd consider it closed just not fully filled up.

JuanCarlos1 posted...

Biggest scam of US insurance. Imagine paying EXTRA, before getting benefits you pay for monthly.

The real scam is that if you need to use your insurance regardless of who is at fault, they make you pay it back and then some for the next 5 or so years in the form of much higher premiums

One thing that really annoyed me about my old dental insurance was that it lowered prices even when the insurance refused to pay.

MrAntisocial posted...

The real scam is that if you need to use your insurance regardless of who is at fault, they make you pay it back and then some for the next 5 or so years in the form of much higher premiums

Confirm.

Someone hit my parked car with a moving van. Their insurance didn't cover the driver in the van. My insurance had to pay. My insurance went up.

The people that hit me also had to pay my insurance company too. Such a scam. I had just paid the car off the same month too.

You'll have one rate you pay before meeting the deductible and another you pay after.

A high deductible plan is for people who are ok with eating small expenses but want protection from absurd costs. For example, I can pay $150 or so to just see a doc for twenty minutes but I'll be in deep poodoo if I need a $70k knee replacement.

lderivedx posted...

One thing that really annoyed me about my old dental insurance was that it lowered prices even when the insurance refused to pay.

This is actually the scummy secret behind insurance that has made healthcare as expensive as it is. They generally don't pay. They send you an explanation of benefits letter each time you use your insurance that shows what the company actually did, and only rarely have I seen them pay anything.

Generally all they do is make the provider (eg, doctor/hospital) accept like a tenth of what they bill because the whole health insurance industry is a cesspit of cockroaches, which in turn is why the providers have to bill so damn much.

RetuenOfDevsman posted...

This is actually the scummy secret behind insurance that has made healthcare as expensive as it is. They generally don't pay. They send you an explanation of benefits letter each time you use your insurance that shows what the company actually did, and only rarely have I seen them pay anything.

Generally all they do is make the provider (eg, doctor/hospital) accept like a tenth of what they bill because the whole health insurance industry is a cesspit of cockroaches, which in turn is why the providers have to bill so damn much.

It feels like a protection racket. I don't know if the dentist was giving me the "normal" price and marking up uninsured people's bills or if the insurance company said "look if you don't cut costs for our clients we won't work with you when we do decide to cover costs," and so the dentist had to do some stuff at a loss.

ugh wtf, I'm reading all the replies about health/dental (which I also barely know anything about) and it's just making me sad

insurance sucks

BucketCat posted...

I'm trying to change my car policy because it's increasing by $250 for some reason for the next 6 month policy period even tho I've never been in an accident and have been driving for 15 years.

I was in a similar situation. My car insurance just went up by well over $100 (6-month policy) for no goddamn reason, and I didn't get my bill until right before I left on vacation. Didn't have the chance to shop around before I left and the next payment was due.
BucketCat posted...

insurance sucks

Indeed.

ninjaman44 posted...

My car insurance just went up by well over $100 (6-month policy) for no goddamn reason,

For me it seems I just have to keep watching mine. They seemingly permanently logged my miles wrong (which affects my premium), and last year they added 5,000miles to the log for no reason, and when I filled it again, I couldn't, because I was still under that last posting.

ninjaman44 posted...

I was in a similar situation. My car insurance just went up by well over $100 (6-month policy) for no goddamn reason, and I didn't get my bill until right before I left on vacation. Didn't have the chance to shop around before I left and the next payment was due.

I'm pretty much convinced that the loyalty discounts are useless. They give the best rates to new policy holders and then slowly jack up the rates.

Geico had decent rates but I won't deal with them anymore. They promised to subrogate a claim for me but near the end when they found out it was under my deductible they essentially told me to go fuck myself and they weren't interested in pursuing the claim anymore. Fortunately the other guy's insurance was easy to work with. They also jacked up my rate as a result. My car was parked on a one way street and a guy backed into my car to give a traffic stop more room

KaZooo posted...

For me it seems I just have to keep watching mine. They seemingly permanently logged my miles wrong (which affects my premium), and last year they added 5,000miles to the log for no reason, and when I filled it again, I couldn't, because I was still under that last posting.

I have no idea why mine went up as much as it did, and this isn't the first time this has happened.

MrAntisocial posted...

I'm pretty much convinced that the loyalty discounts are useless. They give the best rates to new policy holders and then slowly jack up the rates.

Yeah my driving record is pretty much flawless and I've been with the same company for years and my rates have never been higher.