Purpose and Function of a Deductible in an insurance policy ?? ( P&C perspective)

That's a perfect textbook response. That may be the exact, or close to it, definition from my p&c insurance study textbook.

You had me at perfect.

But in full transparency, I am only 5 foot 6, not scientifically a midget, but called one on occasion by teachers I was bullying as student
 
I would say, simply put, to give the insured some skin in the game on a claim, and can discourage frivolous and or fraudulent claims.

Caveat, not a current Medicare beneficiary, merely a donor currently

Purpose of deductible is to retain small risk & transfer larger risk to carrier with deeper pockets. The larger a person's ability to absorb losses, the greater they can choose a deductible to be & obtain premium savings from carrier.

That's a perfect textbook response. That may be the exact, or close to it, definition from my p&c insurance study textbook.

So, a followup question -- for the way things work in the P&C world.

If a carrier offers a consumer some kind of coverage with a deductible option -- either to discourage frivolous claims from the consumer or to allow the consumer to lower their premium -- or both;

Does the carrier hard wire in a specific deductible amount, take it or leave it; or is the consumer allowed to choose deductible limits, perhaps within some range of amounts?

Thanks.
 
So, a followup question -- for the way things work in the P&C world.

If a carrier offers a consumer some kind of coverage with a deductible option -- either to discourage frivolous claims from the consumer or to allow the consumer to lower their premium -- or both;

Does the carrier hard wire in a specific deductible amount, take it or leave it; or is the consumer allowed to choose deductible limits, perhaps within some range of amounts?

Thanks.
depends on the state. Some states may require really low deductible options like a $0 or $50 deductible on personal lines policies, but carriers would default their quote systems to start with the deductible level they prefer. Anything less than $1,000 on a home policy is going to cost more not only because of the potential payment, but the cost to have claims reps handle those smaller claims administratively. Auto likely gets best pricing at $500 or more deductible (some lenders wont allow deductibles higher than a certain amount). A rider to a home insurance might have a much lower deductible like $0 or $50 on some items like jewelry

Commercial insurance can & will have much higher deductibles. I have seen some as high as $500,000 deductibles on hard to place/high risk & high value business operations. commercial insurance is less regulated by state laws than personal lines home/auto.

Are you writing a book? (disclaimer: if you are writing a book, you dont have my permission to use any of my sarcastic, sophmoric or political comments in the book)
 
Back when the Obama administration was designing the affordable care act, they added a rule to Medicare. That supplements could not offer first dollar coverage anymore. They felt like first dollar coverage encourages people to go to the doctor unnecessarily compared to if they had a deductible to meet. They would only go if they needed to go. That's why the plan F was removed from the market for people aging into Medicare after the date of that change.
I would have to think that's the same stance that the insurance companies themselves have on deductibles.

Thank you for the time you took to give me a considered response to my question. (Actually I was also both surprised and pleased to see it here, away from the "maddening crowd" so to speak.)

If I remember, and information continues to fall out the way it is going now, I think I will have a followup comment for you in relation to your last sentence, but I am not quite sure of my ground for comments yet.
 
depends on the state. Some states may require really low deductible options like a $0 or $50 deductible on personal lines policies, but carriers would default their quote systems to start with the deductible level they prefer. Anything less than $1,000 on a home policy is going to cost more not only because of the potential payment, but the cost to have claims reps handle those smaller claims administratively. Auto likely gets best pricing at $500 or more deductible (some lenders wont allow deductibles higher than a certain amount). A rider to a home insurance might have a much lower deductible like $0 or $50 on some items like jewelry

Commercial insurance can & will have much higher deductibles. I have seen some as high as $500,000 deductibles on hard to place/high risk & high value business operations. commercial insurance is less regulated by state laws than personal lines home/auto.

Are you writing a book? (disclaimer: if you are writing a book, you dont have my permission to use any of my sarcastic, sophmoric or political comments in the book)

He's writing a book for the general public. It's going to be called "How to fall asleep in under 5 minutes guaranteed."
 
Are you writing a book? (disclaimer: if you are writing a book, you dont have my permission to use any of my sarcastic, sophmoric or political comments in the book)

Hmmmmm. I think you have probably lost your chance for free publicity on the back of the dust jacket as an important contributor. You could apply your disclaimer to any statement of yours I quote that you dislike my having quoted, saying I should have known that was a sophomoric comment, and sue me.
 
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