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Insurance Deductibles Made Simple

The Nolen Agency

If you're just stepping into adulthood or an overall beginner in the world of insurance, deductibles can be complicated. Even some experts have trouble deciding what the best deductible for their home or automobile is. Today you will learn the definition of an insurance deductible, how they work, and other basics to make choosing an insurance policy easy.


An insurance deductible is the amount of money the policyholder – you – will have to pay before the insurance company starts paying for you.

For example, if your home suffers $5,000 in damages and you have a $1,000 deductible, you have to pay the $1,000 and the insurance company pays the remainder, if you choose to file a claim.


Insurance protects you financially, but you must do your part. Companies will charge you based on this risk you're willing to take. Your risk is the amount you wish to pay in case of an emergency – your deductible.


In most cases, insurance companies will set a minimum deductible. You have the option to increase the amount. However, it cannot be lowered. The company’s minimum varies by state and policy. Whether you choose the minimum or maximum amount, you ultimately decide on how much your deductible will be.

Am I Choosing the Right Amount?

The right amount is generally based on worth and affordability. You can seek guidance when choosing the value of your home, automobile, and other insurance policies from an insurance or appraisal company. Remember, the higher the risk you are willing to pay is less risk for your insurance company. In simpler terms, higher deductibles result in lower premiums and monthly payments. The lower the deductible, the higher the amount.

Different Policies, Different Deductibles

Different insurance policies offer separate deductibles. Because policies are regulated by the state, ask your insurance agent or state insurance commissioner about your state laws for a better understanding.

The Nolen Agency is an independently owned Texas agency. Our offices are in Chandler, Texas and Athens, Texas. We offer personalized customer service, a wide range of provider and products, home and auto quotes, and many other services. Contact us today for quotes and answers to all insurance related questions from one of our friendly agents. Once you’re on board, you can join our referral program. Spread the word to friends, family, and neighbors and receive a $25 gift card when they ask for a quote and mention your name!

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