Deductible Clause

Definition - What does Deductible Clause mean?

A deductible clause is a clause in an insurance contract that states that the insured must pay a specific amount of money before the insurance policy will kick in to help pay for losses. Deductible clauses are used in a variety of insurance fields and also vary greatly in amounts.

Insuranceopedia explains Deductible Clause

Deductible clauses are a way for policyholders to share some of the financial responsibility with their insurance companies. Usually, deductibles only represent a small fraction of the annual aggregate limit that an insurer will pay for a policy. For example, a health insurance policy may have a deductible clause of $4,000, and the annual aggregate limit of the policy for the insurer may be $100,000. Thus, even though deductible clauses result in policyholders being responsible for covering some for their insured expenses, this amount usually pales in comparison to what the insurer is responsible for.

Connect with us

Insuranceopedia on Linkedin
Insuranceopedia on Linkedin
Tweat cdn.insuranceopedia.com
"Insuranceopedia" on Twitter


'@insuranceopedia'
Sign up for Insuranceopedia's Free Newsletter!