What is Deductible?
Deductible is The proportion of a loss for which the Insured is responsible. A one-off amount that the Insured may pay or which the insurer may deduct from a claim settlement. In the event of a claim being lodged for the loss of or damage to an item that is subject to a policy limit or sub-limit, if the loss suffered by the Insured is greater than that of the sum of both the sub-limit and the deductible together, then the insurer may not be entitled to retain a deductible. A deductible may also have a direct relationship to the amount of insurance premium charged for a particular risk, ie. the greater the amount of deductible, the lower the amount of premium. A deductible may be applied on an amount or franchise basis, meaning that an insurer may apply a deductible to claims up to a specified amount of loss, however, losses over the amount of the deductible (or time period with a time deductible) are paid in full.