In Arizona, what must an insured pay before their insurance policy coverage begins?

In Arizona, the requirement for an insured to pay a deductible before insurance policy coverage begins is particularly relevant to many types of insurance policies, including health, auto, and property insurance. The deductible is the amount the insured is required to pay out-of-pocket for a claim before the insurance company will start to pay its share of the costs. This is designed to reduce the number of small claims and encourage policyholders to be more mindful of their coverage.

When a claim is made, the insured must first pay their deductible amount, after which the insurance coverage kicks in for expenses that exceed this threshold. For many policies, the contract will specify the deductible amount, and it's crucial for policyholders to understand this aspect of their coverage to manage their financial responsibilities appropriately when a claim arises.

This process does not involve paying the full premium at this stage, as the premium is typically paid when the policy is established. Additionally, while administrative fees may exist, they are separate from the payment structure that dictates when coverage begins. Therefore, understanding the role of the deductible is key to grasping how insurance policies function in Arizona.