Scenario: I pay X amount of dollars per month for car insurance. I have all 4 tires stolen from my vehicle overnight. I submit a claim with my insurance company to repair any damages. I now pay a **hefty** X amount of dollars for the event that has occurred.
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Picture that you get a Playstation for your birthday. Your mom says “Give me $2 from your allowance a week and if your Playstation dies I’ll buy you a new one minus $50. OR you can give me $5 from your allowance a week and if your Playstation dies I’ll buy you a new one minus $10.
You don’t get much of an allowance so $50 would be difficult but you go that route and you are extra careful to not rage quit and smash your system. If you go with the $10 deductible you’re going to be less careful with it and more likely to tell her you need a new one if your friend scratches their name into the top of it.
Usually insurance plans do vary your yearly cost depending on what your deductible is. You can have a lower one, but it’ll cost you more in your premium. That’s the balance, you choose what “hefty” means based on your premium.
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