Deductible
The amount you pay out of your own pocket before your insurance kicks in. A higher deductible usually means a lower premium, and vice versa. Deductibles reset each policy period or per claim, depending on the type of insurance.
Real-World Example
James has a $500 deductible on his home insurance. When a storm causes $3,000 in damage, he pays the first $500 and his insurer covers the remaining $2,500.
Related Terms
Disclaimer: This glossary entry is for informational purposes only and does not constitute financial or insurance advice. Consult with a licensed insurance professional for personalized guidance. GuardianChoices may earn affiliate commissions from links on this site — see our advertiser disclosure.
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