Straight Deductible Clause

Definition of "Straight deductible clause"

Jason Nicolai real estate agent

Written by

Jason Nicolaielite badge icon

Century21-AshevilleNC.com

Section of a policy that specifies the dollar amount or percentage of any loss that the insurance does not pay. Most property and medical policies specify that the first portion of any loss is absorbed by the insured. A straight deductible clause, which is common in auto and homeowners insurance, might provide for a deductible stated in a dollar amount, such as $500. For example, the Smiths have a homeowners policy with a $500 straight deductible clause. Fire damage to the home amounts to $1500. Under the terms of the policy, the Smiths would pay the first $500 and the insurance company would reimburse them for $1000. Some straight deductibles are expressed as a specific percentage of value rather than a dollar amount. For example, the insured might absorb the loss for 5% of the value of property that is totally destroyed.

image of a real estate dictionary page

Have a question or comment?

We're here to help.

*** Your email address will remain confidential.
 

 

Popular Insurance Terms

Reckless action without regard to life, limb, and/or property; for example, driving 100 miles per hour on a road or highway. ...

Law that established rules and regulations to govern private pension plans, including vesting requirements, funding mechanisms, and general plan design and descriptions. For example, three ...

Rejection by an insurance company of an application for a policy. ...

Life insurance policy clause. If at the end of the grace period the premium due has not been paid, a policy loan will automatically be made from the policy's cash value to pay the premium. ...

Combination property, liability, and business interruption policy. It is usually written to cover expenses of small and medium size businesses resulting from damage or destruction of ...

Fund that concentrates primarily on short-term government securities, certificates of deposit with maturities less than one year, and high-quality interest-bearing corporate debt. The fund ...

Coverage that pays a fixed dollar amount of interest at regular intervals. ...

Nominal interest rate minus the rate of inflation. ...

Pooling of assets of two or more pension funds under common portfolio management. ...

Popular Insurance Questions