What does a split deductible entail in an insurance policy?

A split deductible in an insurance policy refers to the application of multiple deductibles for different causes of loss or types of claims. This means that if a policyholder experiences losses from various sources, the insurance contract stipulates specific deductibles that apply to each category of claims. For example, there may be a lower deductible for certain types of damages, such as theft or vandalism, while a higher deductible may apply to other types, such as vehicle collisions or comprehensive losses.

This approach helps insurers manage risk and maintain premium levels by differentiating between the types of claims that could be made under a policy. It also allows policyholders to tailor their coverage and potentially reduce costs for specific risks they feel they can manage, essentially giving them more control over their insurance expenses.

In contrast, a single deductible for all claims would not offer this kind of differentiation, and the other options similarly do not reflect the definition of a split deductible accurately, providing a clearer understanding of this insurance concept.