In
insurance, the deductible is the amount the
policy holder will be
liable for before the
insurance company begins
covering costs. Typically, the deductible for a policy is a
calendar year amount.
For example, if a policy has a $500 deductible, and the policy holder needs to claim $2000 in January and $3000 in November, the policy holder would pay $500 and the insurance company would pay $4500. The policy holder may be liable for more than just the deductible though, depending on other aspects of the policy such as
coinsurance.
The higher the deductible (the more the policy holder must pay in the event of a
claim), the lower the
premium, and
vice versa.
Health insurance companies typically offer premiums in the range of $250 - $5000.
Auto insurance companies may offer deductibles for many different aspects of a policy, for example separate deductibles for
bodily injuries,
property damage,
stolen possessions,
natural disasters, etc.