Declaration

The deductible is the amount payable by the insured before the insurer starts to pay the claim. For example, a car damaged in a collision might have a $500 deductible and no damage under that would be covered. Any amounts over that, would have $500 deductible taken off any claim payment. A $750 claim would be paid $500 by the insured, and $250 by the insurance company. The insured might not be willing to submit a claim that small, considering the effect a claim would have on their insurance rates.