Define "deductible" in an insurance policy.

A deductible is a specific amount that an insured individual is required to pay out of their own pocket before the insurance coverage kicks in to cover the remaining costs associated with a claim. This feature is designed to deter policyholders from filing small claims, which helps keep premiums down and encourages responsible use of insurance. For example, if you have a health insurance policy with a $500 deductible, you will need to pay the first $500 of covered medical expenses yourself. Once you've met that deductible, the insurer will begin to pay its share of the costs according to the terms of the policy.

The other options reflect different insurance terms but do not accurately describe what a deductible is. The total amount of insurance coverage refers to the maximum benefit provided by the policy, the percentage of the claim paid by the insurer relates to co-insurance, and the maximum amount an insurer will pay for a claim describes policy limits. All these concepts are integral to understanding insurance coverage, but they do not define the deductible itself.