What is a deductible?

deductible is the amount of expenses that must be paid out of pocket before an insurer will pay any expenses.  In general usage, the term deductible may be used to describe one of several types of clauses that are used by insurance companies as a threshold for policy payments.

Deductibles are typically used to deter large number of trivial claims that a consumer can be reasonably expected to bear the cost of. By restricting its coverage to events that are significant enough to incur large costs, the insurance firm expects to pay out slightly smaller amounts much less frequently, incurring much higher savings. As a result, insurance premiums are typically cheaper when they involve higher deductibles.