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In an [[insurance]] policy, the '''deductible''' is the amount paid
[[Out-of-pocket expenses|out of pocket]] by the policy holder before an insurance provider will pay any expenses.<ref>{{cite book |last = O'Sullivan |first = Arthur |
Deductibles are typically used to deter the large number of 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.{{fact|date=November 2015}} As a result, [[insurance premium]]s are typically cheaper when they involve higher deductibles. For example, health insurance companies offer plans with high premiums and low deductibles, or plans with low premiums and high deductibles. One plan may have a premium of $1,087 a month with a $6,000 deductible, while a competitive plan may have a premium of $877 a month with a $12,700 deductible. The consumer with the $6,000 deductible will have to pay $6,000 in health care costs before the insurance plan pays anything. The consumer with the $12,700 deductible will have to pay $12,700.<ref>[https://money.cnn.com/2013/11/21/news/economy/obamacare-affordable/ How 'affordable' are Obamacare plans?] By Tami Luhby, CNN, November 21, 2013</ref>
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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 [[car accident|accidents]] for which the holder is responsible, or [[vandalism]] and [[theft]]. Depending on the policy, the deductible may differ based on the type of expense incurred that triggers the insurance claim.<ref name="Vehicle Owners FAQ"/>
Third-party [[legal liability|liability]] coverages including auto liability, general liability, garage keepers, inland marine, professional liability and workers compensation are also written with deductibles. These deductibles on commercial liability policies are known as third party deductibles or liability deductibles. Because the insured and claimant are not the same entity, insurers cannot pay the claim minus the deductible. This creates a receivable owed from the insured to the insurer. Due to the complexity of identifying these third party deductible receivables, many are often missed by the insurer causing millions of dollars to go uncollected.<ref>{{cite news |first=Joseph |last=Warnagiris
An insured has the option to accept an appearance allowance that can be used towards their deductible. Appearance allowances help manage repair costs by allowing for the insured to choose not to fix expensive parts that have minor damage and using the money towards their deductible.<ref>{{Cite journal|last=Lee|first=Sharon M.|last2=Edmonston|first2=Barry|date=2010|title="Canadian" as National Ethnic Origin: Trends and Implications|journal=Canadian Ethnic Studies|volume=41|issue=3|pages=77–108|doi=10.1353/ces.2010.0040|issn=1913-8253}}</ref>
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{{wiktionary|franchise}}
{{Wiktionary}}
*{{cite news |first=Joseph |last=Connelly
*{{cite news |first=Joseph |last=Warnagiris
[[Category:Insurance]]
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