Abatement

Abatement refers to the reduction in the amount of a claim due to policy provisions such as deductibles, policy limits, or coinsurance. For example, if a health insurance policy has a high deductible, the abatement represents the portion of medical expenses the insured must pay out-of-pocket before the insurer covers the rest. This term is pertinent in discussions about high deductible health plans (HDHPs) and their effect on policyholders.