What is a deductible and how does it affect claims?

A deductible is the amount you pay out of pocket before your insurance company starts covering costs. For example, if you have a $1,000 deductible and file a claim for $5,000 in damages, you pay the first $1,000 and your insurer covers the remaining $4,000. Deductibles directly affect whether filing a claim makes financial sense. If your loss is less than or close to your deductible amount, filing a claim may not be worth it since you'd receive little or no payout while potentially seeing your premiums increase. Higher deductibles generally mean lower monthly premiums, while lower deductibles mean higher premiums. Choosing the right deductible involves balancing what you can afford to pay upfront versus what you want to pay regularly.