What is the result of having a lower deductible in terms of premiums?

Having a lower deductible generally results in higher premiums. This is because the deductible is the amount that the insured must pay out-of-pocket before the insurance coverage kicks in for a claim. When an insured chooses a lower deductible, the insurance company risks having to pay out claims sooner and more frequently. To compensate for this increased risk, the insurer typically charges higher premiums.

In essence, a deductible acts as a cost-sharing mechanism between the insurance company and the policyholder. By opting for a lower out-of-pocket expense in the event of a claim, the policyholder is essentially paying more through their premiums to maintain that level of financial protection. This option may be appealing for those who prefer to have less financial burden at the time of a claim, but it does mean higher upfront costs in terms of insurance premiums.