Deductible
The amount you pay out of pocket on a claim before insurance contributes.
Plain definition
A deductible is your retained share of a covered loss. It applies per claim or per policy year depending on line of business and policy wording. After you pay (or absorb) the deductible, the insurer pays eligible amounts up to limits, minus any other policy conditions.
Why it matters
Deductibles directly trade monthly premium against claim-time cash. Choosing a higher deductible lowers premium but increases what you need on hand when something goes wrong.
Example
Hail damages your roof for $12,000. With a $2,500 deductible, the carrier may pay $9,500 toward covered repairs if the claim is approved—subject to policy terms and any depreciation rules.
Common misunderstanding
A deductible is not the same as a copay or an annual out-of-pocket max on health plans. Auto and home deductibles usually apply per occurrence, not as one yearly pool.
Policy language always controls. This is educational content, not advice. See our disclaimer.