What is the advantage of having a high deductible in an insurance policy?

A high deductible in an insurance policy typically leads to lower premium costs. This is because when you agree to pay a higher amount out-of-pocket before the insurance coverage kicks in, the insurer takes on less risk. As a result, the insurance company can charge you a lower premium since they are less likely to have to pay out claims for smaller, routine expenses.

Choosing a higher deductible can be economical for policyholders who are confident in their ability to handle smaller claims themselves and want to save on their monthly or annual insurance costs. However, it is important to ensure that the deductible amount is manageable in the event of a significant loss.

The other options do not accurately reflect the primary financial benefit of a high deductible. Higher total coverage may not be inherently tied to the deductible amount, a broader range of coverage typically refers to the types of risks covered rather than the deductible level, and more efficient claims handling does not necessarily correlate with the deductible chosen. Thus, the most viable advantage of a high deductible in an insurance policy is indeed lower premium costs.