Insurance Deductible (Excess)
The amount you pay out of pocket on a claim before your insurance starts covering the rest.
A deductible, sometimes called an excess, is your share of any insured loss before the insurer pays. Choosing a higher deductible usually lowers your premium, because you take on more of the small risks yourself. The trade-off is that you must be able to cover that amount when a claim happens, which is where an emergency fund matters. Setting the deductible too high to chase a cheap premium can backfire if a claim arrives before you have the cash. Balancing premium savings against your reserves is the key decision.
Example
With a $500 deductible, a $3,000 car repair claim means you pay the first $500 and the insurer covers the remaining $2,500.
Try in Assetli
Read more
Related terms
Insurance Premium
The recurring amount you pay, monthly or yearly, to keep an insurance policy active.
Emergency Fund
A liquid cash reserve set aside to cover unexpected expenses or income loss, typically 3–6 months of essential living costs.
Explore more terms
Insurance Claim
A formal request to your insurer to pay for a covered loss or event.
Liability Insurance
Coverage that pays for harm or damage you cause to other people or their property.
VAT (Value Added Tax)
A consumption tax added to the price of most goods and services, ultimately paid by the end consumer.
Tax Credit / Allowance
An amount subtracted directly from the tax you owe, reducing your bill euro for euro.
Tax Base
The amount of income or value on which tax is calculated, after deductions but before credits.
Tax Return
An annual filing that reports your income and deductions to calculate the tax you owe or are refunded.