What are deductibles?

Your insurance policy will require you to pay an agreed amount of certain losses. The higher the deductible, the lower the premium. Deductibles in homeowner policies generally are $500; this means that you pay the first $500 of each claim and the insurer pays the rest. For example, if your policy specifies a $500 deductible and you experience a loss of $2,000, you are responsible for the first $500 and the policy responds to cover the balance of $1,500. Know the deductibles that apply to your policy before you need to make a claim.