Deductible

What is Deductible? 

A deductible is the amount of money that the policyholder must absorb before the insurance policy begins to reimburse the policyholder. For example, if a policy has a deductible of $500 and the policyholder files a claim for $10,000 in damages, the insurer will pay out the remaining $9,500 after the policyholder pays the deductible.

Deductibles are typically included in insurance policies to help manage the risk for the insurer and to reduce the overall cost of the policy for the policyholder. Higher deductibles usually result in lower premiums, while lower deductibles typically result in higher premiums. Policyholders can choose the deductible amount that works best for them based on their budget and risk tolerance.