What is a deductible A deductible is the amount of damages that you agree you will be responsible for if you have a claim. This amount is not paid to the company, it simply becomes your share of the loss and is deducted from the payment.
Deductibles serve several functions.
Adjusting claims for small amounts often costs more than the dollar amount of the claim. The cost of insurance would be much higher if there were no deductibles. The higher the deductible, the lower the premium.