A deductible or excess is something you have on your policy when you have either, Hospital & Surgical coverage or Motor coverage. And it’s a dollar amount – it could be $500, $1000 or $3,000.
Quite simply put, the deductible is what you are responsible for, before the insurance company pays out anything on your behalf to fix your vehicle or seek medical treatment.
The lower your deductible, the higher your premium is going to be. Conversely, the higher the deductible you have, the lower your premium is going to be.
Reason is this – you, the driver or the patient, are taking on more risk with a higher deductible. When you have a lower deductible, you are putting more risk on the insurance company. As a result, your premiums are affected in this way.