What is an insurance deductible?

A deductible is the amount you pay toward a covered loss before your insurance pays. For example, with a $500 deductible and a $3,000 covered repair, you pay $500 and your insurer pays $2,500. Choosing a higher deductible usually lowers your premium but means paying more when you file a claim. In health insurance, the deductible is usually a yearly amount you pay for covered care before your plan starts to pay.

Sources: Insurance Information Institute — What is covered by a basic auto insurance policy?; HealthCare.gov — Deductible · Reviewed Sep 13, 2026