What is an "insurance deductible"?
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What is an "insurance deductible"?
Sam Friedman (Editor-in-Chief, National Underwriter, Property & Casualty Edition) gives expert video advice on: What is an "insurance claim"? and more...
An insurance deductible is the amount of loss that you pay out of your own pocket, even if you have insurance. This is negotiated as part of the policy with your insurance agent and carrier. Usually it's pretty standard, for example a $250 or $500 deductible on your homeowner's insurance policy. One of the reasons an insurance deductible is in place is to discourage people from putting in small claims in abundance. The insurance is really there to cover you in case of a catastrophic, serious loss. If, for instance, you have a $500 deductible and you have a $5,000 loss, you would pay the first $500 and then the insurer would pick up the rest from there.