Do higher deductibles generally lead to lower premiums?

Higher deductibles generally lead to lower premiums because insurance companies typically assess risk when determining the cost of premiums. A deductible is the amount you pay out of pocket before your insurance coverage kicks in. When you choose a higher deductible, you are essentially assuming more of the financial risk associated with a claim. This means that the insurance company is taking on less risk, which often translates into lower premiums for the policyholder.

By opting for a higher deductible, you are acknowledging that you are willing to pay more out of pocket in the event of a claim, and as a result, the insurer can afford to charge you less for covering your risk. This can be a financially advantageous decision for individuals who believe they might not need to file many claims or who have sufficient savings to cover a higher deductible if necessary.