What is a characteristic of property insurance deductibles?

A characteristic of property insurance deductibles is that they are deducted from each covered loss. This means that every time a claim is made for a covered event, the deductible amount is subtracted from the total amount of the claim payout. For instance, if a policy has a deductible of $1,000 and a covered loss is determined to be $5,000, the insurer would typically pay $4,000 after the deductible is applied.

This structure encourages policyholders to be more cautious about making claims, knowing that they will have to pay out-of-pocket for a portion of the loss each time. It also helps insurance companies manage risk by ensuring that policyholders share in the financial responsibility for smaller losses.

In contrast, the other options present common misconceptions about how deductibles function in property insurance. For instance, deductibles do not typically apply once per year, nor are they deducted from the total policy limit. A fixed fee for all claims is also inaccurate, as the deductible can vary depending on the details of each claim or the policy itself, rather than being a set amount across all situations.