What will a policy with a franchise deductible cover if the total damages are less than the deductible amount?

A policy with a franchise deductible is structured in such a way that it only offers coverage if the total damages exceed a specified threshold, which is the deductible amount. If the total damages fall below this threshold, the policy does not provide any coverage for those damages.

To illustrate this, let’s say the franchise deductible is set at $5,000. If the total damages incurred amount to $4,000, which is below the deductible, the insurance policy will not pay anything; hence, the insured will cover the entire cost of damages themselves. This is in contrast to standard deductibles where there might be partial coverage even if the damages are below the deductible amount.

Therefore, when total damages are less than the deductible amount, the correct outcome is that no damages will be covered by the policy.