An insurance deductible is a specific amount of money that you, the policyholder, must pay out of pocket before your insurance coverage kicks in. Deductibles are common in many types of insurance policies, including health insurance, auto insurance, and homeowners insurance.
The purpose of a deductible is to share the risk between the insurance company and the policyholder. By requiring the policyholder to pay a deductible, the insurance company can offer lower premiums. Deductibles can also help to deter people from filing frivolous claims.