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The portion of an insured loss the must bear before or as part of the insurer's payment.
Save conceptA deductible is the portion of a covered loss that the policy leaves to the under its terms. It is also called an excess in many policies. The insurer generally deducts it when calculating the amount payable, but the basis varies. It can be a fixed amount or a percentage of a specified insured value, not necessarily a percentage of the damage.
The policy identifies the applicable deductible, including any special rule for storms or other events. After establishing coverage and the relevant loss, the claims calculation applies the deductible and other terms. A larger deductible can reduce the insurer's risk and may affect the premium. It also means the must absorb more of a qualifying loss before receiving a payment.
Suppose a hypothetical policy has a 2% storm deductible based on a J$20 million sum insured. That deductible is J$400,000. For a covered J$1 million loss, the payment would be J$600,000 if no other adjustments apply. It would not be J$980,000: that mistaken result applies 2% to the loss rather than to the insured value specified in the example.
A deductible differs from an exclusion, which removes cover, and a limit, which caps the benefit. A loss below the deductible can produce no payment even when the event is covered. Where an or other adjustments also apply, the policy's calculation and ordering need checking. Never infer the cash shortfall from a percentage without identifying its base, event and wording.
Jamaican insurers report J$54.35 billion in Melissa payments; 983 claims remain