GlossaryEN1 min readUpdated: Jun 26, 2026

Deductible insurance

A freight forwarder receives an insurance settlement after a cargo claim and finds the first amount is not covered – that portion is the deductible.

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Last updated: 26 June 2026Published: 27 January 2026

Source: https://www.investopedia.com/terms/d/deductible.asp

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Definition & Explanation

A freight forwarder receives an insurance settlement after a cargo claim and finds the first amount is not covered – that portion is the deductible. Under a deductible insurance policy, the policyholder and insurer agree in advance on a fixed sum or percentage that the insured absorbs before the insurer responds; only the excess is reimbursed. This structure significantly reduces premiums because the insurer avoids processing small claims. In freight forwarding and logistics, deductibles are standard in cargo insurance, liability covers, and warehouse policies alike. The deductible (excess) should not be confused with a franchise threshold: a deductible is always subtracted from any claim payment, whereas a franchise disappears entirely once the loss exceeds a defined threshold.

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Deductible insurance

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