What does a Per Claim Deductible entail?

A Per Claim Deductible involves an amount that the policyholder must pay out-of-pocket for each individual claim they file. This means that if a policyholder experiences multiple incidents requiring claims, they would need to pay the deductible for each one separately, regardless of how many claims they have submitted during a policy period.

This structure encourages policyholders to manage their claims and avoid filing minor claims since they would bear a financial responsibility for each. It contrasts with a cumulative or aggregate deductible, where a total amount would be deducted from the sum of all claims made within a certain timeframe. The clear delineation of responsibility in a per claim deductible can also assist insurance companies in controlling claim frequencies and costs.

This is why your understanding is aligned with the concept of a Per Claim Deductible, emphasizing the separate financial impact of each incident on the policyholder.