The three terms that shape what you pay, and what you get, when comparing insurance policies.
A premium is what you pay to keep a policy active. A deductible is what you pay toward a covered claim before insurance contributes. A coverage limit is the most a policy will pay for a covered loss.
Higher deductibles often lower premiums but raise your out-of-pocket cost when you claim. Compare policies on coverage, exclusions, limits and deductibles, not only on price.
| Term | Meaning |
|---|---|
| Premium | The recurring price of a policy |
| Deductible | Your share of a covered loss before insurance pays |
| Exclusion | Something the policy does not cover |
Not necessarily. Compare coverage, limits and exclusions.
State insurance departments and the NAIC offer consumer resources.
The three terms that shape what you pay, and what you get, when comparing insurance policies.
Principal, interest, taxes and insurance explained, plus how a down payment changes the amount you borrow.
Principal, interest, taxes and insurance explained, plus how a down payment changes the amount you borrow.
Disclaimer: This article is for educational purposes and is not personalized financial, investment, tax, legal, or lending advice. Read the full disclaimer.
