Question

A deductible usually applies to which of the following automobile policy coverages?

a) Liability coverage
b) Collision coverage
c) Comprehensive coverage
d) Uninsured motorist coverage

Answer 1

A deductible is part of the insurance policy terms and usually applies to collision and comprehensive coverage in auto insurance, requiring the policyholder to pay a set out-of-pocket amount before the insurer pays the remaining costs.

Step-by-step explanation:

A deductible is a feature of many insurance policies, including automobile insurance. Specifically, a deductible applies to collision coverage and comprehensive coverage. These types of coverages require the policyholder to pay out-of-pocket up to the deductible amount before the insurance company covers the remaining costs of a claim. For instance, if your auto insurance has a $500 deductible, you would have to pay the first $500 of any covered repair, and the insurance would pay for the costs above this amount. Conversely, liability coverage and uninsured motorist coverage typically do not require deductibles. Instead, these coverages usually kick in from the first dollar of loss, up to the policy limits.