Deductible in an insurance contract that provides for a decreasing deductible amount as the size of the loss increases, so that small claims are not paid but large losses are paid in full. Some carriers have used this term for personal lines policies where the deductible decreases each year the insured remains claim free until no deductible applies.
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Deductible that gradually disappears as the value of loss increases.
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Once commonly used in property insurance contracts, a disappearing deductible provides for a decrease in the amount of deductible as the amount of the loss increases. For example, if an insured has a $500 disappearing deductible on a homeowner’s policy, it would work something like this: On a loss under $10,000 the $500 deductible applies. For a loss between $10,001 and $25,000 the deductible amount drops to $250. For losses over $25,000 the deductible “disappears” and the insured has full coverage. Disappearing deductibles are rarely used in today’s insurance market.