Franchise Deductible

What Does Franchise Deductible Mean?

A franchise deductible is the amount the insured must pay before the insurer begins covering the full cost of damages. Unlike a standard deductible, once the franchise deductible threshold is met, the insurer covers the entire loss amount without further deductions.

Insuranceopedia Explains Franchise Deductible

If a policy specifies a franchise deductible of $100, the policyholder will cover any costs up to $100 out of pocket. The insurance company only intervenes financially when the expenses exceed this $100 threshold. However, once the amount surpasses this deductible, the policy will cover the entire cost up to the policy’s limit.