Texas Adjuster Practice Test 2025 – The All-in-One Guide to Exam Success!

The correct answer is deductible, which refers to the fixed amount that the insured is responsible for paying out-of-pocket before their insurance coverage kicks in to cover the remaining expenses. In other words, it's the portion of the loss that the insured agrees to pay before the insurance company will pay its share for a claim. This amount helps to manage the risk and cost for both the insurer and the insured, as it ensures that the insured is also invested in mitigating losses and can potentially lower the premium costs.

In contrast, other terms listed, such as adjuster, co-payment, and premium, represent different concepts within insurance. The adjuster is a professional who evaluates and assesses insurance claims, co-payment typically pertains to health insurance (where the insured pays a fixed amount for specific services), and the premium is the amount paid periodically by the insured to maintain the insurance policy. Understanding these distinctions is crucial in grasping the fundamental workings of insurance.