Insurance policies often include something called a deductible, and understanding how it works can help you make better decisions about your coverage and out-of-pocket costs. Whether you’re buying car, health, travel, or home insurance, the deductible affects how much you pay at the time of a claim and how much you pay in premiums throughout the year.
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A deductible is the amount of money you must pay toward a covered claim before your insurer contributes to the remaining costs. It can be a fixed amount or a percentage, depending on the type of policy. In simple terms, the deductible is your share of the financial responsibility when something happens.
For example, if your deductible is THB 5,000 and your approved repair cost is THB 20,000, you pay the first THB 5,000 THB and the insurer pays the remaining THB 15,000.
Deductibles serve several purposes:
Deductibles can vary by policy type and structure:
When you file a claim, the insurer reviews the damage or expenses and calculates the approved claim amount. Your deductible is then subtracted, and you pay that part yourself while the insurer pays the rest. If the claim amount is lower than the deductible, the insurer generally will not pay anything.
Deductibles in motor insurance often apply when you opt for a voluntary excess to lower your premium or when accident circumstances require you to share repair costs. They are calculated per claim, meaning each separate accident or damage event may involve its own deductible.
A deductible is the amount you agree to pay out of pocket before the insurer covers the remaining claim. It’s often voluntary and helps reduce your premium. Deductibles are common in:
Meanwhile, an excess is compulsory in motor insurance and is set by the Thailand’s Office of Insurance Commission (OIC). It’s the first portion of the loss you must pay when certain conditions apply in each incident, especially when you’re at fault in an accident or no third party can be identified.
In short, deductibles are more common outside motor insurance, while excess relates specifically to car insurance claims are assessed. Both reduce the insurer’s payout, but they’re applied and referenced differently depending on the policy.
Deductibles determine both the cost of your insurance and how much you pay when you make a claim. A higher deductible usually results in a lower premium because you’re taking on more of the financial responsibility if something happens. A lower deductible does the opposite: it keeps out-of-pocket costs low during a claim but increases your premium.
They also help reduce small or frequent claims, which is one of the ways insurers keep overall premiums affordable for everyone. Understanding how your deductible is set, and how it affects your payments, can help you choose an insurance policy that fits both your budget and your expectations.
Choosing the right deductible depends on your financial comfort level and how often you expect to claim. If you want lower premiums and don’t mind paying more during a claim, a higher deductible may make sense. If you prefer predictable costs and want to minimise what you pay out of pocket when something happens, a lower deductible offers more certainty.
It also helps to consider the type of insurance you’re buying. Health, motor, travel, and home insurance all apply deductibles differently, so it’s worth reviewing how each structure works. The goal is to find a balance between premium savings and a deductible amount you can confidently afford in an emergency.
Higher deductibles usually mean lower premiums, while lower deductibles often result in higher premiums.
You pay the deductible only when you file a claim that exceeds your deductible amount. If the claim is less than your deductible, you cover the full cost.
Yes, most insurers allow you to adjust your deductible when renewing your policy or sometimes mid-term. Increasing your deductible can lower your premium, while decreasing it will raise your premium.
If the repair or damage cost is less than your deductible, your insurance will not pay anything. You’ll pay the entire amount out of pocket.
| Premium | The amount you pay to your insurer, usually monthly or annually, to maintain coverage. |
| Claim | A formal request you make to your insurer for payment or reimbursement after a covered event occurs. |
| Policy year | The 12-month period your insurance contract covers, starting from the effective date. |
| Incident | An event that triggers an insurance claim, such as an accident, illness, or property damage. |
| Covered event | An incident or situation specifically listed in your policy as eligible for insurance benefits, such as accidents, illnesses, or property damage. |
