Deductible
The amount of a covered loss a policyholder pays out of pocket before their insurance coverage applies, a fixed dollar amount on most policies, though some perils (commonly hurricane or named-storm damage in coastal states) use a percentage-of-insured-value deductible instead, which can be dramatically larger than a standard fixed deductible.
Why it matters
A percentage-based deductible on a high-value property can run into tens of thousands of dollars rather than a standard four-figure fixed amount, so policyholders in states that allow separate hurricane or named-storm deductibles need to know which type applies before a storm, not while they're filing a claim.
On a real project
A coastal homeowner's policy carries a standard $1,000 deductible for most claims but a separate 2% hurricane deductible calculated against the home's insured value, a meaningfully larger out-of-pocket amount that only applies to storms officially designated as hurricanes.
Who this matters most to
An Insurance Adjuster subtracts the correct deductible type from the approved scope of loss before issuing payment. A Public Adjuster advises a policyholder on whether a loss is even worth filing a claim for once the deductible is factored in, since a small loss below the deductible amount isn't worth the claim on a policyholder's record.
Where this goes wrong
A homeowner files a hurricane damage claim expecting their standard $1,000 deductible to apply, not realizing their policy specifies a separate 2% hurricane deductible. The actual out-of-pocket amount comes out several times higher than expected, a gap the homeowner only discovers once the settlement is calculated.