A deductible is the amount you agree to pay out-of-pocket for damages before your insurance policy will pay on a covered loss. If you have a $500 deductible, for example, and your home sustains $1,000 worth of covered damages, your insurer will pay $500, which is the amount that exceeded your deductible. To learn more important homeowners terms, visit Homeowners Insurance 101: Glossary of Important Terms.