A deductible is what you pay out in the case of a loss. There are many dollar amounts to choose from. Make sure that you choose the one that best fits your budget. Remember, what you pay out in the time of a disaster should be minimal.
For example, if you are in a car accident, and you are at fault, you will have to pay the first $$amount then the company can come in and help pay for the remainder of the cost to fix the car.
Another example, if your home is destroyed by a tornado, you would be responsible for the deductible amount, and the insurance company would be responsible for the remainder, assuming that the company pays for a tornado loss.