Retention Deductible

What Does Retention Deductible Mean?

A retention deductible is a provision in an umbrella insurance policy that specifies the deductible amount the policyholder must pay for losses not covered by any underlying policy. The exact deductible amount is determined by the terms outlined in the specific umbrella policy.

Insuranceopedia Explains Retention Deductible

A retention deductible applies when no underlying primary policy covers the specific loss. Once the deductible is paid, the umbrella policy will provide coverage, ensuring the policyholder is reimbursed for covered losses, helping to avoid financial catastrophe in the event of a significant loss.

Retention deductibles also benefit insurance companies by slightly reducing the amount they pay out on umbrella insurance claims.