What term is used to describe the amount deducted from an insurance claim?

The term that describes the amount deducted from an insurance claim is "deductible." This is the portion of the loss that the insured must pay out-of-pocket before the insurance coverage kicks in and the insurance company pays the remaining amount of the claim. Deductibles are designed to prevent minor claims and reduce the number of small payouts, encouraging policyholders to take responsibility for small losses.

In insurance policies, a deductible can be a fixed dollar amount or a percentage of the total claim amount. Understanding how deductibles work is crucial because they directly affect the amount the insured will receive when filing a claim after experiencing a loss.

The other terms in the options have distinct meanings that do not pertain to the amount deducted from a claim. "Premium" refers to the amount paid by the policyholder to maintain the insurance coverage. "Exclusion" outlines what is not covered under the policy, indicating specific risks or perils that the insurer will not provide coverage for. "Limit" refers to the maximum amount the insurance company will pay for a covered loss, capping the insurer's liability.

Thus, in the context of insurance claims, "deductible" is the correct term for the amount that is subtracted before the payout from an insurer occurs.