When purchasing certain types of insurance, be sure to check the level of the deductible. That is the amount you will need to pay before the insurance company covers much of the rest of the costs. In some cases, you may be able to purchase additional insurance to cover the amount of a deductible.
Usually higher deductibles on health, homeowners or auto insurance keep premiums low. These higher deductibles increase the amount you need to pay out of your pocket in the event of a loss. In a sense, when you choose to carry high deductibles, you are gambling that you won't need to file a claim or that you'll have the money available to cover the deductible if a claim occurs.
Auto gap insurance is one of the few types of insurance that will cover your deductibles. Gap insurance is typically purchased in situations where a car buyer is borrowing a greater amount of money than the vehicle is worth when financing the purchase. Gap insurance makes up the difference between the vehicle's value and the amount still owed in the event of a total loss. Most gap insurance policies also cover the amount of the comprehensive and collision deductibles.
Uninsured Motorist Property Damage
You may already be familiar with uninsured/underinsured motorist coverage, which covers your injury expenses if you are involved in an accident caused by a driver who carries little or no liability insurance. In some states, you can also purchase uninsured motorist property damage coverage. If you carry the coverage and you are in an accident caused by an uninsured driver, it will pay the amount of your collision deductible, assuming you carry collision coverage on your own policy.
Medicare can cover a large portion of the medical expenses incurred by people 65 and over, but it does require payment of some out-of-pocket expenses, including deductibles. A Medicare Supplement policy, also referred to as Medigap, can help ease the financial burden on seniors by covering these costs and deductibles. Individuals can purchase a Medicare Supplement plan regardless of health conditions if they do so when turning 65. Purchasing a plan at older ages typically requires the policyholder to meet certain health requirements.
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