In personal finance, the amount an insured person pays before an insurer begins covering eligible claims is called a deductible.
For a covered loss, the policyholder generally pays expenses up to the deductible, and the insurer then pays according to the policy’s terms and limits. A $500 deductible, for example, usually means the first $500 of a qualifying claim is the policyholder’s responsibility. The exact rules depend on the type of insurance and contract.
A deductible is not the same as a premium, which is the price paid to keep coverage active. It is also distinct from a copayment, a fixed amount often paid for a covered service, and coinsurance, a percentage-based share. Policies can have separate deductibles for different risks, locations, or coverage categories.