Understanding automobile insurance deductibles

Concerning automobile insurance, the deductible is in fact a form of insurance that puts the insured in jeopardy in his responsibilities in the event of a loss on the vehicle caused by himself, it is however necessary to understand the term signed at the time of the contract, because, there are several methods of calculating the deductible.

What is the franchise?

It is a part of the sum used to cover the insurance of an automobile which is intended to be covered by the insured himself when a loss is caused to his vehicle. All claims can be contracted by the deductible method: theft, fire, damage, etc. The insurance company undertakes to reimburse only a part of the sum of money, but which is generally higher than the deductible that completes the total coming from the insured. It should be noted that the deductible only applies if the insured is liable for the loss or no liability is recognized.

Why the franchise?

Franchising is a tool that serves on the one hand to empower drivers and car owners, so they will be more vigilant and cautious. By sharing the sum, insurers also increase their budgetary security by sharing payment risks when claims occur.

For the insured, the deductible also reduces the insurance contribution. Indeed, if the deductible is high, the contribution decreases and lives towards that. However, it is important to consider that the insured person has the means to cover the deductible himself in the event of a claim, and that he will have to choose the type of insurance that suits him.

What are the different types of deductibles?

The amount of the deductible is determined by the insurer, in general there are two types of deductibles: relative and absolute. The relative or simple deductible considers a threshold below or above which the insurer respectively does not cover or fully covers the amount to be reimbursed.

The absolute deductible has two variants: the fixed deductible, which is fixed regardless of the amount to be reimbursed, the insured will commit to a fixed amount and the insurer will cover the rest. The variable or proportional deductible that corresponds to a percentage of the total amount. There are also other less traditional variants, which combine the two by a method of capping the insured’s load.

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