What is a deductible and how does it affect premiums and claim payments?

• A. The total amount the policy will pay for a single loss, regardless of deductible.
• B. The fee charged by the insurer to issue the policy.
• C. The amount the insured must pay before benefits apply; higher deductibles usually lower premiums and increase out-of-pocket at claim time.
• D. The portion of a loss paid by the insurer after applying the deductible is subtracted.

Answer: (C)