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What’s the difference between a Deductible and a Retention?

Updated over 3 years ago

The deductible or retention on your policy both refers to the amount of money that must be paid by you (the insured), out of pocket, per claim before the policy limits will kick in and the carrier will begin paying.

Deductibles:

  • are usually found on Occurrence policies

  • are funded by the carrier and collected later from the insured

  • reduce (or erode) the limit available to pay claims

Retentions:

  • Also known as SIR or “Self-insured Retention”

  • are usually found on Claims Made policies

  • are paid directly by the insured

  • do not reduce the available limit

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