A deductible calculated as a percentage of an insured value instead of a flat amount.
Why it matters
It can create a much larger out-of-pocket amount than expected.
Example
A 5% earthquake deductible may be based on a dwelling limit.
Common mistake
Assuming 5% means 5% of the claim.
Related terms
deductible;earthquake-insurance
Definitions are educational summaries. The policy's definitions and applicable law control a specific claim or coverage question.