A deductible is the amount of eligible costs you pay yourself before your insurance begins paying, and a copay is the share of each invoice you pay. Deductibles and copays appear in private health insurance, household contents insurance, and personal liability insurance. They can be structured as a fixed annual deductible, a deductible combined with a percentage copay, or a fixed amount per claim. A higher deductible usually means a lower monthly premium, and claims you pay yourself should still be submitted so they count toward your deductible.
What are deductibles and copays in insurance?
A deductible is the amount of eligible claim costs you pay yourself in a given period before your insurance starts paying. A copay is the portion of an invoice you pay each time you use a covered service, either as a percentage of the invoice or as a fixed amount. Both are forms of cost sharing, so you may be responsible for part of a claim even when the claim is covered.
Which types of insurance include a deductible or a copay?
Cost sharing through a deductible or copay is most common in the following types of coverage:
Private health insurance, where a deductible or copay applies to medical invoices.
Household contents insurance, where a deductible applies to claims for damaged or stolen belongings.
Personal liability insurance, where a deductible applies to damage you cause to others.
Not every policy in these categories includes cost sharing, and the amounts vary from plan to plan.
How can my deductible affect my insurance premium?
The deductible and the premium move in opposite directions. In general, the higher the deductible you agree to, the lower your monthly premium payments will be, because you take on a larger share of the costs yourself. A lower deductible means your insurance pays more of each claim, which results in a higher premium.
How does a fixed deductible work?
A fixed deductible is a set amount of eligible costs you pay out of pocket within a calendar year. For example, with a €1,000 annual deductible and no copay, you pay the first €1,000 of eligible claims yourself, and your insurance then pays 100% of eligible claims for the rest of that year. The deductible resets at the start of each new calendar year.
How does a percent-based deductible with a copay work?
A percent-based scheme combines a deductible amount with a percentage you pay on each invoice. For example, with a €500 deductible and a 10% copay, you pay 10% of every invoiced service and your insurance pays the remaining 90%. Once the amounts you have paid in copays add up to the €500 deductible, your insurance pays 100% of further eligible invoices for the rest of that year.
How does a fixed copay per claim work?
Some plans apply a flat copay instead of a percentage, meaning you pay the same set amount for each qualifying claim. For example, a plan with a €25 fixed copay requires you to pay €25 per qualifying claim, and your insurance covers the remainder of the invoice. The exact amount and the claims it applies to are defined in the plan's terms.
Do I need to submit claims that fall within my deductible?
Yes. You should submit every eligible claim, including the ones you pay for yourself, so that the amount is recorded and counted toward your deductible. Keep the invoices and receipts for these claims as proof of what you have paid. If you don't submit them, the amounts may not be credited toward your deductible, and your insurance may not start paying when you expect it to.