Question

What is the purpose of a deductible in an insurance policy?

to pay the insurance company for providing coverage
to limit the number of claims a policyholder can make
to reduce the premium amount the policyholder must pay each month
to require the partial payment of repair costs before insurance covers the rest

Answer 1

The correct answer is: to require the partial payment of repair costs before insurance covers the rest.

A deductible is the out‑of‑pocket amount the policyholder must pay on a claim; it reduces moral hazard and helps keep premiums lower.