What is a Corridor Deductible?
A corridor deductible is a type of insurance deductible that is commonly used in health insurance policies but is becoming more popular in property and casualty insurance. The term refers to a secondary deductible that kicks in after a policyholder meets their insurance policy limit. After meeting their corridor deductible, the insured has access to additional coverage. However, the insurer may pay only a portion of the covered expenses, while the insured must pay the remainder.
Corridor Deductible in More Detail
For example, a policyholder has an initial deductible of $5,000 and a coverage limit of $10,000. After paying their deductible and receiving the full $10,000 of coverage, their $7,500 corridor deductible kicks in. Once they’ve paid the corridor deductible their insurance covers 80% of additional claims up to the next coverage limit.
Subscribe to The Shield
A bite-sized newsletter outlining industry insights & best practices for high-growth companies.