Final answer:
A $100 deductible in an insurance policy means the insured must pay the first $100 of a covered expense out-of-pocket. This is a strategy to share costs and discourage overuse of insurance benefits. Policies with higher deductibles typically have lower premiums.
Step-by-step explanation:
A $100 deductible means that the policyholder must pay the first $100 of any covered expense out-of-pocket before the insurance company begins to pay. This is a common feature in insurance policies, including health insurance or auto insurance, to prevent moral hazard and ensure that the insured party bears a portion of the costs. Deductibles can vary greatly in amount, and policies with higher deductibles usually have lower premiums because they involve less financial risk for the insurer.