Deductible

A deductible is a dollar amount threshold that the insured must meet before the insurance company is required to reimburse when a loss occurs. For example, a homeowner’s policy might carry a $1,000 deductible. That means that, were the covered property to suffer a loss valued at $10,000, the insured would pay the $10,000 but only be reimbursed $9,000 by the carrier.

A higher deductible is often a means to reduce the premium owed on a policy. It is worth noting that the deductible only applies once per claim; an insured suffering a loss, would be responsible for the deductible amount before the insurer paid anything, but once that threshold is met it will not need to be paid again during the resolution of the particular claim regardless of how much work is done or however many contractors might need to be brought in, until the coverage limits are exhausted.

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