Deductible
Your share of a claim before insurance pays. A $1,000 deductible means the first $1,000 is on you.
A deductible is the portion of a covered loss the policyholder absorbs before the insurer pays anything. It is not a separate bill from the insurer — it comes out of the payout. On a $6,000 covered repair with a $1,000 deductible, the insurer's share is $5,000, and the shop or contractor collects the other $1,000.
Deductibles attach to specific coverages, not to the policy as a whole. On auto, collision and comprehensive each carry their own, and each generally applies per claim — two separate incidents in one year usually mean two deductibles. Liability coverages typically carry none, because that money is paid to someone else.
Home policies work per occurrence and often carry more than one deductible. A flat dollar amount covers most losses, while a separate wind and hail deductible is common in storm-prone states and is frequently written as a percentage of the dwelling limit rather than a fixed figure. One percent of a $400,000 dwelling limit is $4,000.
Deductible and premium generally move in opposite directions. A higher deductible usually lowers the premium, because more of each loss is being kept by the policyholder; a lower deductible does the reverse. Where a household lands on that trade depends on cash on hand and on how it feels about small claims, which is a personal call rather than a rule.
One practical effect: when a loss lands near the deductible there may be little or nothing left for the insurer to pay, and the claim can still become part of the claim history other insurers review. That is part of why the deductible amount shapes which losses turn into claims at all.
In real life
Hail dents a roof in Texas and the repair estimate comes to $18,000. The policy carries a $1,500 flat deductible for most losses, but a separate 2% wind and hail deductible applies here — 2% of the $350,000 dwelling limit, or $7,000. The insurer pays $11,000 and the homeowner covers $7,000. The flat $1,500 never enters the math.
Common questions
Do I have to pay my deductible if I'm not at fault?
It depends which policy the repair runs through. Claiming against the other driver's property damage liability involves no deductible, but it waits on their insurer accepting fault. Going through your own collision coverage means paying the deductible up front; if your insurer later recovers from the other side through subrogation, the deductible is typically reimbursed in whole or in part.
Is there a deductible on liability insurance?
Personal auto and homeowners liability coverages normally have no deductible. The insurer pays covered third-party injury or damage claims from the first dollar up to the limit, and also pays for legal defense. Deductibles show up on the coverages that pay for the policyholder's own property, such as collision, comprehensive and dwelling coverage.
What happens if the repair costs less than my deductible?
The policy pays nothing, because the deductible comes off first. A $900 repair under a $1,000 deductible leaves no insurer payment at all. Insurers still generally record a reported loss even when no money changes hands, so a claim opened below the deductible can show up in claim-history databases later.
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Definitions describe how these terms are generally used across the U.S. market. Wording, limits and exclusions vary by insurer, policy form and state — the policy you hold is what controls. See the full Insurance Glossary.