What type of deductible requires the insured to pay a fixed amount before the policy covers the losses?

A fixed deductible requires the insured to pay a specific dollar amount out-of-pocket before the insurance policy will begin to cover any losses. This means that after the insured pays this predetermined sum, the insurance company will take over and handle the remaining costs associated with a covered claim.

This type of deductible offers predictability for the insured since they know exactly how much they will need to pay in the event of a claim. It's commonly used in many types of insurance policies, as it simplifies the claims process and clarifies the amount of financial responsibility an insured party holds before benefits kick in.

In contrast, other types of deductibles, like the franchise deductible, can operate differently – for example, where coverage only begins after the loss exceeds a certain threshold, leading to more complex calculations for the insured. Percent deductibles are based on the total value of the insured property, meaning the amount the insured pays varies with the claim size. Variable deductibles fluctuate with the level of risk or the size of the claim, which might create uncertainty regarding payment responsibilities.