Stephanie has a homeowners insurance policy for her $355,000 home with an annual premium of $0.42 per $100 of value and a deductible of $500. Under this policy, in the event of a major mishap, Stephanie would have a total annual out-of-pocket expense

Under this policy, in the event of a major mishap, Stephanie would have a total annual out-of-pocket expense of $500 which is the deductible of the insurance policy. The out of pocket expense is a cost that a person must pay in order to activate his or her insurance. Based on this policy, there is no copay or coinsurance cost, thus, Stephanie only responsible for paying the deductible.