Deductibles

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Updated: Aug 20, 2021

The part of any insured loss which has to be borne by the insured party. The UK term for this is an excess. The point of making the insured bear the first part of any loss is partly to reduce moral hazard by making them more careful, and partly to avoid the administrative cost of processing numerous small claims.

Reference: Oxford Press Dictonary of Economics, 5th edt.



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