How does a $1000 deductible work?

Most deductibles are a flat dollar amount, $500, $1000, $2500; and deductible amounts do vary by state. A deductible is the amount of money you will pay out-of-pocket during an insurance claim before the insurance company pays their portion. For example, let’s say that your deductible is $1000 and you experience a fire in the kitchen, that causes $18,000 dollars in damage to your home.  You will pay $1000 and the insurance company will pay the remaining $17,000 once the damage has been rebuilt.