Higher deductibles, lower premiums, and what changes when a claim happens before the loan is paid off.
A deductible is the amount a policyholder pays out of pocket on a covered claim before insurance pays the rest. Comprehensive and collision coverages each carry their own deductible.
Choosing a higher deductible generally lowers the monthly premium but raises the out-of-pocket cost at claim time. On a financed or leased vehicle, the deductible is also the amount that gets subtracted from any physical damage settlement that flows to the lender or to a gap product.
Lenders frequently cap the maximum deductible permitted while the loan or lease is active, often at a level below what an unencumbered owner might otherwise choose.
Informational only. Lienholder Lane publishes educational content and does not sell, broker, or recommend insurance products.
