What can trigger a deductible in an insurance policy?

A deductible in an insurance policy is a specified amount that the insured must pay out-of-pocket before the insurance coverage kicks in for a claim. The triggering event for a deductible typically occurs when a claim is filed for coverage. This means that when an individual experiences a loss or damage that falls under their insurance policy terms and submits a claim, the insurer will apply the deductible to that claim amount.

For example, if someone has a $500 deductible and they file a claim for $2,000 worth of damages, they will need to pay the first $500 themselves, after which the insurance company will cover the remaining $1,500. Thus, the act of filing a claim is essential to determining the application of the deductible.

Renewal of a policy, the issuance of a new policy, or the expiration of the current policy are all administrative actions that do not by themselves result in the need to apply a deductible. They do not involve any claims being made or any incidents triggering the coverage, which is why these options do not relate to how a deductible is activated.