A deductible is the amount of money you must pay out of pocket before your insurance coverage takes effect. It is a predetermined sum that you agree to pay when you file a claim for covered services or expenses. 

What is per-incident deductible?

A per-incident deductible is a type of deductible that applies to each separate incident or claim you make. It means that every time you file a claim, you will need to pay the deductible amount before your insurance coverage begins. 

For example, if you have a per-incident deductible of $500 for car insurance and get into two separate accidents in a year, you would need to pay the $500 deductible for each accident before your insurance coverage kicks in.

What is annual deductible?

An annual deductible is a deductible that applies to a specific period, usually a calendar year. It is the total amount you need to pay out of pocket for covered services or expenses within that year before your insurance coverage starts. Once you reach your annual deductible, your insurance coverage will typically begin to cover a portion or the full cost of eligible claims for the remainder of the year.

Final thoughts

It’s important to understand the terms of your insurance policy, including the deductible structure, as they impact your out-of-pocket expenses and coverage limits.

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