# Deductible

_Glossary_

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The amount the insured must pay out of pocket before the insurer pays on a covered claim, or the amount subtracted from each loss.

A deductible is the portion of a covered loss borne by the policyholder. It may apply per claim, per occurrence, or annually depending on the policy. Higher deductibles lower premium; lower deductibles increase premium.

In property claims, the insurer typically subtracts the deductible from the claim payment rather than billing separately. Wind/hail deductibles may be percentage-based in coastal areas.



A $10,000 covered loss with a $2,500 deductible yields a $7,500 payment. A 2% hurricane deductible on a $400,000 dwelling is $8,000 per storm.