Deductible

Absolute deductible is a common clause in insurance policies, referring to a specified amount or percentage that the insured must bear themselves after an insured event occurs; the insurer only compensates for the portion exceeding this deductible. In foreign trade, it is mainly applied in cargo transportation insurance (such as marine and air transport insurance). Usage scenarios include: when insuring against all risks or with particular average, both parties agree on a fixed deductible (e.g., USD 500 per occurrence), so small losses are borne by the cargo owner, and large losses are compensated by the insurer. Notes: Deductibles are divided into absolute deductible (deducted for each occurrence) and relative deductible (full compensation when loss exceeds the deductible, without deduction); the former has a greater impact on the costs of foreign trade enterprises. In addition, the deductible may be expressed as an amount or a percentage and must be clearly stated in the policy. Difference from 'deductible rate': the deductible rate is a proportional concept, while the absolute deductible is a fixed amount. Different from 'attachment point': the attachment point only determines whether compensation is triggered and does not deduct an amount. Foreign trade practitioners should reasonably choose the deductible based on cargo value, risk probability, and premium cost to balance risk and expense.