Deductible

From Financial Literacy Wiki

In an insurance policy, the deductible or excess is the portion of any claim that is not covered by the insurance provider. It is normally quoted as a fixed amount and is a part of most policies covering losses to the policy holder. The deductible must be "met", that is, paid by the insured, before the benefits of the policy can apply.

For example, a person might have an auto insurance policy with a $500 deductible on accident coverage. If this person were in an accident that did $1200 worth of damage to the car, then the insurance company would pay him/her $700. The insured is responsible for the first $500 of damage (the deductible), and the insurance company pays the balance.