Stipulations in an insurance policy that require an insured to pay an initial portion of a loss before getting insurance benefits. The deductible is the amount of expenses that must be paid out of pocket before an insurer will pay any expenses. It is normally quoted as a fixed quantity and is a part of most policies covering losses to the policy holder. The deductible must be paid by the insured, before the benefits of the policy can apply.
Additional meaning of Deductible:
Typically, a general rule is: the higher the deductible, the lower the premium, and vice versa. Depending on the policy, the deductible may apply per covered incident, or per year. For policies where incidences are not easy to delimit (for example health insurance), the deductible is typically applied per year.
In a typical automobile insurance policy, a deductible will apply to claims arising from damage to or loss of the policy holder's own vehicle, whether this damage/loss is caused by accidents for which the holder is responsible, or vandalism and theft.