What is a policy deductible?

A policy deductible is an amount of money that a policyholder must pay before their insurance coverage kicks in. In the state of Arizona, it is an amount that is specified in the policy, and it is the amount the policyholder is responsible for covering before their insurance company will pay out a claim. For example, if a policyholder has a $500 deductible, they will be responsible for the first $500 of any claim they make, and the insurance company will pay out the remaining part of the claim. The deductible is commonly used to help keep insurance rates low, since it reduces the number of smaller claims the insurance company needs to pay out.

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