Question

When applying an insurance adjustment to a patient account, what are you not required to cost?

Answer 1

Basically, the deductible is the part that is “subtracted” from the payment made by the insurer for the loss suffered by the insured.

Traditionally, in the insurance contract, deductibles have the function of dividing the risk between the insured (the client) and the insurers. Thus, when a loss occurs, the insured pays a portion of it out of pocket, this portion being known as the deductible.

The deductible can be a specific amount, that is, a figure in dollars, or it can be a percentage of the total amount of the insurance contracted in the policy. In general, the higher the deductible, the lower the premium will be paid for an insurance policy. The deductible amount is listed on the front page of the “statements” for a homeowners insurance policy or auto insurance policy, which generally means it is on the front page of the document.

Here's how a deductible works: If you have a deductible set as a specific amount, let's say $ 500, that money, the $ 500 is the portion of the damages that you will pay. The insurance will pay the money above that $ 500 that is necessary. If the insurance determines that your loss is $ 10,000, then the amount of the award or check that you will receive will be $ 9,500 ($ 10,000 of the loss less $ 500 of the deductible).

The deductibles expressed in percentages are calculated based on the total insurance amount of the insured property. Let's say your home is insured for $ 100,000 and you have a deductible equal to 2%, that is, $ 2,000 deductible. If there is a claim, the $ 2,000 will be “deducted” from the claim or the compensation check you receive. For a loss of $ 10,000, a 2% deductible means $ 2,000 less. That is, the check would be for $ 8,000 ($ 10,000 loss minus $ 2,000 deductible).

In many parts of the country, deductibles have been steadily increasing. In hurricane-prone states, where there is a higher risk of a catastrophic event, special deductibles may be allowed on homeowners insurance claims when damage is caused by a hurricane. Typically the deductibles known as hurricane deductibles are higher and are almost always expressed as a percentage, not a specific amount.

Deductibles on a property insurance policy work differently than deductibles on other insurance, for example deductibles on health insurance. In a health policy there is a deductible that accumulates for the year. With an auto or home insurance policy, the deductible works differently - it applies with every claim that is filed. An exception to this rule is the way in which hurricane deductibles are applied in the state of Florida. Hurricane deductibles in Florida are not subtracted with each storm or hurricane, but are accumulated by the season.

The main reason hurricane deductibles exist is because they help maintain the availability of insurance coverage for coastal communities through private insurers and keep their prices affordable. The interest and willingness of private insurers to offer coverage in many areas helps maintain competition and prices, giving consumers more choice. That way, consumers residing in areas where there is competition can compare prices and services when looking for insurance for their properties.