Franchise Deductible

Published: | Updated: December 22, 2017

Definition - What does Franchise Deductible mean?

A franchise deductible is the amount the insured has to pay before the insurer covers the rest of the damages. Unlike an ordinary deductible, once the franchise deductible is paid, the entire loss will be covered.

Insuranceopedia explains Franchise Deductible

Supposing that the policy states that the franchise deductible is $100, the policyholder will pay for that out-of-pocket any time he gets charged $100 or less. Only when it goes above $100 does the insurance company will financially intervene on the policyholder's behalf. However, once the amount exceeds that particular deductible, the policy will pay for everything up to the policy's limit.

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