Many types of insurance—such as health, auto, renter’s, and homeowner’s—require you to pay a certain amount of expenses before the policy covers your remaining costs. This out-of-pocket expense is called your deductible. For example, if you have a medical bill for $2,000 and your deductible is $500, then you must pay $500 before the policy will pay all or a portion of the remaining $1,500 in covered benefits.