[1] In general usage, the term deductible may be used to describe one of several types of clauses that are used by insurance companies as a threshold for policy payments.
[citation needed] As a result, insurance premiums are typically cheaper when they involve higher deductibles.
[2] Deductibles are normally provided as clauses in an insurance policy that dictate how much of an insurance-covered expense is borne by the policyholder.
For policies where incidents are not easy to delimit (health insurance, for example), the deductible is typically applied per year.
For example, a single housing insurance policy may contain multiple deductible amounts for loss or damage arising from theft, fire, natural calamities, evacuation, etc.
Depending on the policy, the deductible may differ by the type of expense incurred that triggers the insurance claim.
The complexity of identifying these third-party deductible receivables often causes many to be missed by the insurer and millions of dollars to go uncollected.
Therefore, health insurance deductibles often tend to be imposed on a term basis (e.g. annually), rather than a per visit threshold.
That is similar to co-insurance in which the company pays a certain percentage of the losses, coupled with minimum and maximum payment thresholds.