Get a quote

×

Join Our Distribution List Today!



×
Need help managing your business risks during COVID-19? – CLICK HERE FOR INFO YOU CAN USE
ALIGNED Insurance

Call Toll Free
1-866-287-0448

What Is A Deductible?

What Is A Deductible?

Insurance is full of jargon and we’ve been doing our best to help explain some of the commonly used acronyms, shot forms abbreviations and common terms that insurance professionals use regularly. We have written posts to date explaining everything from:

Why do deductibles exist?

Insurance companies use many tools and techniques to minimize their risk and deductibles are just one of many including:

  • Amending policy wordings
  • Adding exclusions
  • Increasing rates
  • Exiting certain classes of business
  • Imposing stricter underwriting guidelines for eligibility
  • Requiring specific risk management steps and/or services be taken
  • Introducing warranties
  • Including subjuctivities on quotes
  • Increasing deductibles or self insured retentions
  • Other

So…what is a deductible?

A deductible is ultimately a tool that insurers use that requires the insured to participate in the loss. For example if equipment was stolen from an insured’s location the insurance policy which would cover this loss would have a deductible which needs to be paid by the insured or would be used to reduce the amount the insured ultimately receives. More specifically if a $10,000 of property was stolen and the policy had a $2,500 deductible the insured would ultimately only receive $7,500. As you can see this helps reduce the amount the insurance company has to pay. Deductibles are used to discourage insured’s from submitting small claims as insurers are admittedly not well equipped and/or efficient in handling small claims. For example if $3,000 in property was stolen and the policy had a $2,500 deductible the insured would only receive $500 if they submitted a claim which may not be worth the time, effort, energy, impact on future insurance rates etc. to proceed with a formal claim and the insured would like just not report the claim and incur the full $3,000 loss.

For more information on what is a deductible or other business insurance questions contact an ALIGNED Insurance broker today
1-866-287-0448

It’s time to get insurance value and choice aligned. Want Canadian business insurance that aligns with your bottom line? We can help. 365. Call us toll-free at 1-866-287-0448 or click to Get a Quote!

We’re ALIGNED across Canada. The ALIGNED Insurance National Operations Centre in Cambridge, Ontario supports our Toronto, Calgary and Vancouver offices. Our industry peers consistently recognize us as one of Canada’s best insurance teams. 100% Canadian-owned, we are super proud to be one of the fastest-growing insurance brokerages in the country.

We deliver e-news you can use. Get practical business insurance insights in your inbox every month. 19,000+ people subscribe to our free ALIGNMENT Matters e-news. Just click the JOIN OUR DISTRIBUTION LIST button – at the bottom of our homepage – to get connected.

365 | Get ALIGNED. Every day, Canadian business leaders read our insurance insights. Find us on LinkedIn, TwitterFacebookInstagram and YouTube.

Leave a Reply

Your email address will not be published. Required fields are marked *

CLICK HERE TO GET A BUSINESS INSURANCE QUOTE NOW