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Deductible

What it means
The amount you pay out of pocket on a covered claim before the insurance policy may start paying.
Tennessee example
Your Nashville auto policy lists a $500 collision deductible — after a covered fender-bender, you pay the first $500 toward repairs.
Why it hits your wallet
A higher deductible often means a lower premium, but it also means more cash needed when something goes wrong.

Think of the deductible as your share of the loss. It shows up on the declarations page for coverages like collision, comprehensive, and homeowners/renters property claims. Liability claims often work differently — don’t assume every coverage type uses the same deductible structure.

Choosing a deductible is a cash-flow decision, not a personality test. If a $1,000 hit would wipe out your emergency fund, a lower deductible may matter more than shaving a few dollars off the monthly premium.