(1) A deductible-type program under which the insured agrees to reimburse its
insurer for its own losses during the policy year up to the agreed upon annual
aggregate amount. Once the insured has paid losses up to that amount, the
insurer pays the remainder of losses for the annual period without seeking
reimbursement from the insured. (2) The amount by which a loss or applicable
coverage limit is reduced in order to determine the amount of the insured's
recovery. In standard property insurance practice, the deductible amount is
subtracted from the amount of the adjusted loss; the insurer pays this reduced
amount, and the insured is responsible for the deductible amount.