A deductible is the amount a homeowner must pay out-of-pocket toward a covered damage or loss before their insurance company steps in to cover the remaining costs. Policies with higher deductibles typically come with lower premiums.
An impound account, also known as an escrow account, is a type of savings account set up by a mortgage lender to pay property taxes and insurance premiums on behalf of the borrower.
Prepaid expenses refer to amounts that are paid in advance for goods or services to be received in the future. These expenses are recorded as assets until they are consumed, at which point they are expensed on the income statement.
