Ace the Nebraska P&C Exam 2026 – Unlock Your Insurance Genius!

Question: 1 / 400

What is a "deductible" in property insurance?

The total amount of coverage provided by the policy

The premium amount paid for the insurance policy

The amount the policyholder pays out of pocket before the insurance company pays a claim

A deductible in property insurance refers to the amount that a policyholder must pay out of pocket before the insurance company contributes to a claim. This means that if a covered loss occurs, the insured party will first need to cover expenses up to this predetermined deductible amount. Once the deductible is paid, the insurer will cover the remaining eligible costs up to the policy limit.

In this context, deductibles serve several purposes: they help to reduce the number of small claims made by policyholders, as individuals are incentivized to cover minor expenses themselves. Additionally, they often lead to lower premiums for policyholders, as taking on some of the risk reduces the insurer's overall liability.

Understanding deductibles is crucial for property insurance policyholders, as it directly impacts out-of-pocket expenses during a claim and overall insurance costs.

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The sum of money available for emergency repairs

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