In a percentage deductible, what does the insured pay?

In a percentage deductible, the insured is responsible for paying a percentage of the insured property's value. This type of deductible is often used in insurance policies to determine the initial out-of-pocket expense that the policyholder must cover before the insurance company begins to pay for a claim.

For example, if a property has a value of $100,000 and there is a percentage deductible of 5%, the insured would need to pay $5,000 before the insurance kicks in to cover any additional damages. This structure is particularly common in property insurance policies, especially in areas prone to natural disasters, allowing insurers to manage risk more effectively.

The other potential choices outline different forms of deductibles or payment responsibilities that do not align with how a percentage deductible functions. A flat rate per incident would imply a fixed amount owed regardless of the property's value, and paying the entire amount would contradict the purpose of having any deductible in place. Similarly, claiming that no payment is required does not accurately reflect the intended financial responsibility of the insured under a percentage deductible policy.