Payment of the franchise under the insurance contract

Franchise in insurance - what is it in simple words?

“What is a deductible in car insurance?” - a common question among people who want to insure a vehicle at a profit. Franchising in insurance is quite common abroad; in Russia it is just beginning to gain momentum. This is primarily due to a lack of understanding of the positive and negative aspects of such insurance.

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Franchise in insurance - what is it in simple words?

A deductible is an exemption from the insurance company from indemnifying part of the losses under the insurance policy in the event of an insured event (damage). The benefit is provided in the form of a certain percentage of the damage caused or in a fixed amount. If a franchise is included in the contract, a discount is provided for issuing a CASCO policy. For example, the cost of a franchise is 10 thousand rubles. In the event of an insured event, the damage of which is less than the specified amount, is borne by the policyholder. If the amount of damage is greater, the insurance company will pay for the repairs.

At the legislative level, the concept was enshrined in the Federal Law “On the organization of insurance business in the Russian Federation” by an amendment adopted on January 21, 2014. Before the amendment came into force, the deductible was also applied in practice. This is confirmed by Resolution of the Plenum of the Supreme Court of the Russian Federation No. 20 of June 23, 2013. It states that part of the amount of losses can be reimbursed by the policyholder if the damage is less than the agreed amount.

Pros and cons of insurance with a franchise

Insurance with a franchise has its advantages and disadvantages.

The advantages include:

Save time. In case of minor damage, the policyholder may not contact the insurer. When an insured event occurs, you are usually required to provide a certificate from the traffic police about the accident or from the police department about the initiation of a criminal case, set aside time for an insurance company employee to inspect the vehicle, and fill out several applications. Busy people give up this paperwork in favor of work.
Discount when taking out insurance. When a franchise is included in an insurance contract, its cost is significantly reduced. In the event of an insured event, the insurance company will pay the amount of damage exceeding the agreed amount. Depending on the type, the damage is paid in full or minus the deductible.
Providing a discount when renewing an insurance contract. In case of accident-free driving, the client may be given an additional discount on issuing a CASCO policy.
Saving money. Firstly, receiving a discount when taking out an insurance policy, and secondly, if you drive without accidents, additional investments in repairs are not required.

The main disadvantage of registering a franchise is that it is unprofitable for drivers who often get into accidents. Such citizens will have to constantly spend money on both minor and major repairs, since for the most part the deductible is unconditional.

Types of deductibles in insurance

Depending on the conditions, there are several types of franchises.

Unconditional deductible in insurance - what is it?

The most popular type is the unconditional franchise. It represents compensation for part of the losses by the insurance company minus the cost of the BF (unconditional franchise).

The cost of the BF is 20 thousand rubles. Damage caused amounted to 17 thousand rubles. In this case, losses are compensated by the policyholder.
Unconditional franchise – 20 thousand rubles. Losses – 40 thousand rubles. The insurer will compensate for damage in an amount equal to 20 thousand rubles = 40,000 - 20,000. The rest is reimbursed by the insured.

Another example is the registration of a franchise as a percentage of the loss. The deductible is set at 20% of the damage caused. Thus, in case of causing losses in the amount of 10 thousand rubles, the insurer pays 8 thousand rubles = 10,000 - 20%.

A conditional deductible is compensation for losses by an insurance company that exceed a certain amount established by the contract.

For example, the franchise size is 15 thousand rubles:

In case of damage to the vehicle in the amount of less than 15 thousand rubles, insurance compensation is not paid.
If the damage exceeds the deductible amount, then the insurance pays out in the amount of the damage caused.

It should be noted that in vehicle insurance, a conditional deductible is rarely used. This is due to fraudulent actions to increase the amount of damage.

The temporary type of franchise is characterized by the use of a unit of measurement - time. Insurance is paid if circumstances that could cause an insured event last longer than the specified time.

If the type is not specified in the contract, then it is conditional by default. For example, if it is said that the car will be used from 8 a.m. to 6 p.m., then if an insured event occurs at 9 p.m., insurance will not be paid.

Dynamic

Dynamic is a type of financial insurance characterized by compensation for losses not from the first insured event. If during the period of time established by the contract the vehicle is involved in an accident once, then compensation is provided in full. In subsequent times, part of the costs is transferred to the policyholder.

For example, DF is equal to 10 thousand rubles. The damage amounted to 20 thousand rubles in the first year. The payment will be 10 thousand rubles = 20,000 - 10,000. In the event of a repeat accident with damage exceeding 10 thousand rubles, insurance payments will be reduced by a certain percentage. For example, (20,000 – 10,000) * 10% (reduction factor) = 1 thousand rubles (the amount of insurance payment for careless driving of a car will be reduced so much). This type of franchise encourages drivers to drive carefully.

High is a type of franchise used when insuring high-value objects. The size of the franchise itself is 100 thousand dollars or more. In the event of an insured event, the damage is compensated immediately and in full. After the property is restored, the policyholder reimburses the insurer for the deductible amount.

The concept of “preferential” implies the inclusion in the contract of conditions excluding the payment of insurance compensation. For example, refusal to pay if it is not the policyholder who is at fault, but another driver.

Regressive

Recourse – payment to the policyholder of the amount of damage with subsequent return of the deductible amount. For example, in the event of an accident, damage to someone else's car was caused in the amount of 15 thousand rubles. The regression franchise is 10 thousand rubles. In this case, the insurance company pays damages equal to 15 thousand rubles, but within the limits of the insurance amount. After the operation, she makes a recourse claim to the policyholder in the amount of 10 thousand rubles.

reduction in the cost of the MTPL policy;
compensation for damage in full;
payment is made not by the policyholder, but by the insurer;
an incentive for accident-free driving, since part of the payment for losses is borne by the policyholder.

compensation of part of losses in the amount of the deductible;
costs of conducting cases in court in the event of an insurer filing recourse claims;
burden on the judicial system as a result of late payment.

What is a deductible for CASCO?

A CASCO policy is insurance for damage associated with loss or damage to a vehicle for a certain amount of money. Insurance is paid upon the occurrence of an insured event. A CASCO deductible is a kind of discount for issuing a policy with conditions beneficial to careful drivers.

When a deductible is included in the insurance contract, the policy amount is significantly reduced. The benefit is that the driver:

saves on issuing a policy;
with accident-free driving, there is no additional cost required to resolve minor repairs.

The inclusion of a franchise in the contract is beneficial to drivers who meet the following requirements:

have many years of accident-free driving experience;
Interesting offer for car theft insurance;
funds are available to repair minor damage;
no increasing coefficient for insurance in case of accidents.

As a rule, the contract provides for an unconditional franchise. This means that if an insured event occurs, the insurance company will compensate in full for damage that is higher than the agreed amount, minus the cost of the franchise. For example, the cost of a BF is 30 thousand rubles. The damage is equal to 50 thousand rubles. The insurance company will pay 20 thousand rubles.

How to calculate the franchise?

The franchise amount depends on the parameters established in the contract. For example, the contract states that the amount of the financial contribution is equal to 20% of the amount of damage. In the event of an insured event, the losses from which are estimated at 20 thousand rubles, payments will be 16 thousand = 20,000 - 20,000 * 20%.

The insurer can also provide the client with a choice of a deductible amount that is convenient for him. For example, in the range from 2 to 100 thousand rubles. The following criteria influence the choice:

how much the policyholder is willing to spend on minor repairs;
car model and characteristics;
driving experience;
desired discount when applying for CASCO insurance, etc.

Thus, a client whose car costs more than 2 million rubles will choose a franchise equal to 100 thousand rubles. For example, the damage is 1 million rubles. BF is equal to 100 thousand rubles. 1 million – 100,000 = 900 thousand rubles the insurance company will reimburse for repairs.

A deductible is a condition of an insurance contract that is beneficial to both the insurer and the policyholder. There are several types of franchises that are optimal in certain conditions: conditional, unconditional, temporary, dynamic, etc. The policyholder independently decides whether to include a deductible in the insurance contract.

Franchise in insurance

Franchising is a new phenomenon in the post-Soviet space. Meanwhile, you need to understand its essence in order to be able to save on the price of an insurance policy. An insurance deductible is one of the terms of the contract, which provides some positive difference for the insurance company when paying losses. The size of this bonus amount is the size of the deductible.

What types of insurance deductibles are there?

Franchise in insurance can be conditional or unconditional.

The conditional benefit provides for insurance non-payment if the loss in the event does not exceed the established deductible. And vice versa: if the payment exceeds the deductible, then the amount of the loss is subject to full compensation.

Let's give an example of two options for a conditional franchise. Let the insurance amount under the contract be 100,000 rubles. The real value of the property). A conditional franchise of 1000 rubles has been established.

Option 1. An insured event occurred in the amount of 900 rubles. The insurer does not bear any payments, since the amount of the loss is less than the deductible.

Option 2. The loss on the occasion amounted to 9,000 rubles. The insurance company pays it in full, since the loss is greater than the deductible.

Know: a conditional deductible in insurance is a benefit of insurers, which is applied for losses below a certain deductible, and an unconditional deductible - for all losses, regardless of their size. This is the most common franchise in Russia. Its use includes, for example, CASCO insurance.

Let's give an example of an unconditional franchise. The insurance contract was signed for the amount of 100,000 rubles. (actual value of the property). Unconditional franchise - 1000 rubles.

Option 1. The loss on the occasion amounted to 800 rubles. The insurer does not pay because the loss is less than the agreed deductible.

Option 2. The insurance loss is 7,000 rubles. Insurer payments: 7000 - 1000 = 6000 rubles.

The amount of the insured amount depending on the type of franchise concluded in the amount of 1000 rubles. can be shown in the table as an example

Franchise in insurance: what is it in simple words

In the legislative framework of most CIS countries, the term franchise is used exclusively in the insurance industry. Moreover, in colloquial speech it can be used both to determine individual terms of the contract, and as a designation of the entire type of policy. What are the advantages and disadvantages of a deductible in insurance, what is it in simple words and what are the features of such a condition for the policyholder you will learn from this article.

What is a franchise in insurance: definition and legal meaning

Literally, the term franchise means a benefit. In the insurance industry, the latter is received by the insurer, who, according to the terms of such an agreement, may not compensate for part of the losses in the event of an insured event, which in turn the insured person undertakes to cover. From a practical point of view, this is implemented like this:

The MTPL insurance contract stipulates a deductible of 10%. After the accident, the damage caused by the insured person amounted to $1,000. This means that the insurance company will pay the victim $900, and the remaining $100 must be paid by the policy owner from personal funds.

Thus, the following definition can be formulated:

A deductible in insurance is a certain part of losses that is not subject to compensation upon the occurrence of an insured event.

The process of paying compensation with benefits can be implemented in two formats:

The policyholder receives the insurance amount, from which the deductible amount has already been deducted, and adds the missing funds from his own reserve directly in the process of restoring the damage.
The policyholder pays a deductible amount to the insurance company, which then transfers the full amount to restore the damage to the account of the restoration organization.

Types of franchises in the insurance industry

Each insurance company, for each individual contract, can establish its own rules for calculating the amount withheld and provide for the factors under which such a condition will be met. In other words, under different circumstances, the insurer may or may not receive such a benefit. This determines the types of deductibles in insurance.

Legal types of franchises

According to the principle of calculating the unpaid amount in practice, there are:

Contract with a fixed amount - a specific amount is withheld, regardless of the size of the damage. It can be negotiated both in the national currency (with indexation for long-term contracts) and linked to convertible ones.
A percentage of the total loss - can be set by the insurer as a fixed rate or chosen by the policyholder (regressive), allowing you to influence the final cost of the policy.

Depending on the terms of the contract, benefits are divided into the following types:

Conditional deductible in insurance - a certain amount is specified in the contract. If the loss is less than the established amount, the insurer does not make any payment, and if it is more, it covers the damage in full.
Temporary - Similar to a conditional deductible, this deductible determines whether the insurer will cover the loss, but in this case the condition is a time frame. In other words, the period during which the policyholder loses the right to receive compensation is specified. For example, if the damage occurred in the first three months from the date of signing the contract, the insurance company may provide for the right not to pay compensation.
Unconditional deductible in insurance - retained regardless of the circumstances and valid throughout the entire term of the contract.
Dynamic - the amount of the withheld amount changes depending on the agreed conditions. For example, with each subsequent insured event, the retention rate increases.

For policies with a large insurance payment (usually from $100 thousand), there is another independent type of deductible, called high. Such an agreement works as follows: upon the occurrence of an insured event, the insurance company provides full coverage of losses, and after restoration of the damage caused, the policyholder undertakes to return the amount of the benefit to the insurer.

Ways to cheat with a franchise

Quite often in their practice, insurance companies use the concept of a franchise to obtain additional benefits and bureaucratic deception of the client. For example, many organizations in their advertising campaigns focus on the so-called zero franchise. In practice, this means that the insurer undertakes to fully compensate for the damage, without deducting benefits. Such policies are more expensive because they are unprofitable for insurance companies and in fact this is the most common insurance with its full cost, and the concept itself is just a marketing ploy.

In some contracts, a zero deductible can be established only for certain types of insurance cases, while the entire package of services can be presented as inexpensive insurance with full compensation. Inattentive clients easily fall for such tricks and are faced with the issue of withholding part of the funds only when an insured event occurs.

Another type of tactical deception in the insurance industry is a penalty deductible. Most often, such a condition is prescribed for cases of theft of vehicles or their complete destruction in the presence of certain circumstances. At the same time, the amount of the withheld amount is specified as high as possible, which in general is an unlawful use of the very concept of a franchise as a punitive measure on the part of the insurance company. This situation can only be resolved in court.

For what types of policies can a deductible be established?

Insurance with a deductible has gained great popularity due to the opportunity to save money in cases where a formal policy is required. Therefore, most often such contracts are concluded in the following types of insurance:

Motor vehicles (CASCO).
Drivers' civil liability (MTPL).
Life and health of citizens traveling abroad. Such a franchise is usually set as a fixed amount and is conditional. At the same time, insurers may set it too high, deliberately assuming that the most frequent cases of tourists visiting medical institutions require lower costs, which relieves the insurance company of the obligation to cover the costs.
Mortgage of real estate under a mortgage agreement.

Is it possible to return the franchise?

If the funds received under the insurance policy are not enough to cover the damage, in some cases a return of the deductible is provided. This possibility is present primarily under CASCO policies, but only on the condition that the policyholder is not the culprit of the incident that led to the occurrence of the insured event. This is because the injured party is legally entitled to full compensation for damages. The return itself is carried out at the expense of the culprit’s insurer.

Example : Having a CASCO policy with a deductible of 20%, you were involved in an accident, the culprit of which was found to be another driver who had an MTPL policy. In this case, you receive 80% compensation from your insurance company minus a benefit, and a deductible amount of 20% is collected from the culprit’s insurance company.

To achieve such a return in practice, it is necessary to comply with many formalities and collect a certain set of documents. First of all, you should know that:

The decision on the damage caused is made by both insurance companies (in other words, both parties must evaluate your car).
Protocols and certificates of road accidents are carried out in duplicate for both companies and certified by the relevant control authorities (traffic police).
Two applications are drawn up to receive compensation under CASCO for your own insurance company and to return the franchise under OSAGO for the insurance company of the culprit.

The refund period is up to 30 calendar days from the date of registration of documents. The return application itself can be submitted within three years from the date of the incident, but if the damage has already been restored, it will be more difficult to achieve a positive decision. If the culprit of the incident is not identified, the issue of returning the franchise is referred to the court along with other claims.

Advantages and disadvantages of insurance with a deductible

When considering the question of what a deductible in insurance means, it is important to understand why such a contract format exists. So, from the position of the policyholder, it has the following advantages:

Low cost of the policy . The price of insurance with a deductible is usually 10-15% lower than usual. When taking out mandatory types of policies with a low risk percentage, this is more profitable.
Fast paperwork . Since the insurer’s risk is significantly lower, fewer checks are carried out before signing such an agreement, and in some cases a minimum package of documents is required.

In turn, for the insurance company the advantages of such a contract can be called:

The opportunity to reduce the cost of paying compensation, and sometimes completely relieve oneself of obligations (if the contract is conditional).
Eliminating the need to compensate for minor types of damage and spending resources on investigating such cases.
Attracting more clients by simplifying the process for obtaining policies and making them more affordable.

The main disadvantages of insurance with a deductible for the policyholder are:

Receiving significantly less compensation to restore damage (especially if the contract is unconditional). In some cases, the benefit can be up to 50% - 75% of the compensation amount.
Bureaucratic difficulties in obtaining compensation and processing returns.
When insuring expensive objects (for example, expensive cars), the cost of minor repairs may be higher than the premium for full insurance.

According to experts, the main disadvantage of franchise agreements for an insurance company is the reduction in the overall inflow of funds through the sale of policies. There are also difficulties with promoting such products in the field of lending, and if conflict situations arise with the withholding of funds, the reputation of the insurance company can seriously decline.

Understanding why there is a deductible in insurance, what it is in simple words and in what cases it will be beneficial for you, you will not only save money on purchasing a policy. You will also be able to easily recognize fraudulent schemes of the insurance company and easily resolve controversial issues when conflict situations arise in the course of receiving legal compensation.

Types of franchise for CASCO agreement

When choosing a CASCO contract with a discount, you definitely need to know what the deductible is . The terms and conditions of insurance define sixteen of its types. And the choice will be yours.

Ignorance of the law is not an excuse.

Let's understand in detail what types of CASCO franchise and how they differ from each other. To be sure of adequate compensation for losses in the future. A free CASCO calculator on our website will help you calculate the cost of a franchise agreement.

Unconditional franchise

An unconditional deductible is a partial reduction of the insurance payment by the amount of the established deductible. That is, it is deducted from the total amount of compensation. This type is most often found in CASCO agreements.

Let’s imagine that the contract establishes a deductible of 10,000 rubles. After registering the insurance event, a payment of 30,000 rubles was accrued. The client will receive 20,000 rubles.

Increasing unconditional franchise

The increasing unconditional deductible directly depends on how many times an insured event is recorded per year. And for each accident it will be deducted from the amount of loss. For example, for the first insured event a deductible is set at 10,000 rubles, for the second – 20,000 rubles, and for the third and subsequent ones – 30,000 rubles.

Conditional franchise

The advantage that a conditional deductible is that if the loss is significant and exceeds the deductible percentage, then the calculated amount of compensation is paid in full. And if the damage is less, you will have to pay for it out of your own pocket. But this type of franchise is used quite rarely, as it is unprofitable.

Thus, if the terms of the contract indicate a deductible in the amount of 15,000 rubles, then if an insured event occurs with a loss of 20,000 rubles, the insurer is obliged to compensate it in full. And if the loss is equal to 7,000 rubles, then you will have to pay yourself.

Dynamic franchise

The peculiarity of a dynamic deductible is that it begins to operate not from the first insured event, but from the second. Moreover, with each subsequent loss it will increase. For example, after the first accident, the owner of the vehicle receives 100% of the payment, after the second - minus 5% (deductible), and after the third - minus 10%, and so on.

A vanishing franchise

The size of the disappearing deductible will depend on how many times during the term of the contract the policyholder was involved in an accident. Only in contrast to the increasing unconditional deductible, the amount will decrease with each recorded loss. So, upon the occurrence of the first insured event, a deductible in the amount of 30,000 rubles will be deducted from the amount of damage, the second – 20,000 rubles, and the third and subsequent ones – 10,000 rubles.

Aggregate franchise

The aggregate franchise implies a reduction in its total volume depending on the number of insurance events. The amount of the first and subsequent losses will be deducted from the deductible amount determined by the parties to the transaction until it is equal to zero.

For example, a franchise was set for a client equal to 60,000 rubles. The first insured event occurred, and the amount of damage amounted to 40,000 rubles. In this case, the policyholder will not receive compensation, but the amount of the aggregate deductible will be reduced to 20,000 rubles.

Six months later, the owner of the vehicle had an accident, and the insurance company calculated damages in the amount of 50,000 rubles. Taking into account the remaining franchise, he will receive 30,000 rubles. And when the next loss is registered, the amount of insurance compensation will be paid in full.

Franchise "by event"

Such a deductible is based on a specific insurance event for any risk of damage or theft. For example, the client expressed a desire to install it due to the risk of damage by a third party or stray animals. Except for this condition, damages for other insured events will be paid in full.

Temporary franchise

Typically, a temporary deductible begins to operate from the moment a CASCO policy is issued and represents a certain protection against insurance fraud. During its validity, the insurance company is released from the obligation to compensate for damage.

Some insurers use a similar procedure when insuring the GAP risk (preserving the value of the car in the event of total loss or theft). The temporary franchise is usually at least 10 days. This means that during the first 10 days of validity of the CASCO agreement, the insurer does not bear liability if an insured event occurs.

Franchise “only for the first insured event”

After registering the first insurance event, the amount of the established deductible will be deducted when calculating the amount of payment. If the second occurs, compensation for damage will be transferred in full. So, for example, if the deductible is 10,000 rubles, and the payment for the first insured event is 20,000 rubles, then the owner of the vehicle will receive only 10,000 rubles. But all subsequent losses will be paid in full.

Franchise “from the second insured event”

The deductible has the same operating principle as the previous one, only it is deducted from the amount of the second registered loss. Compensation for damage for the first insured event is made in full.

For example, the terms of the contract establish a franchise in the amount of 10,000 rubles. Upon the occurrence of the first insured event, payment will be made in full. After 3 months, a second accident was recorded, for which compensation for damage amounted to 40,000 rubles. The owner of the vehicle, minus the franchise, will receive 30,000 rubles. The loss for the third insured event will be paid in full.

The "Culprit" Franchise

This type of franchise applies to any risk and is calculated as unconditional. An exception to this condition is those moments when the culprit of the insured event has been identified. This means that the policyholder in this case receives a full payment.

Independent franchise

An independent deductible is established when, for any reason, the policyholder cannot provide his vehicle for a pre-insurance inspection. And it is valid until the procedure is completed. It is expressed as a percentage and can amount to up to 70% of the insurance payment.

Personal franchise

A personal franchise is applied in the case where, for example, at the time of the accident the car was being driven by a person who did not meet the age category and driving experience specified in the CASCO agreement.

Thus, if the conditions of the policy state that the vehicle can only be driven by drivers at least 30 years old and with at least 5 years of experience, then if these rules are ignored, a deductible will be applied.

Franchise for drivers

It is one of the subtypes of personal franchise. is introduced for drivers in the case where the vehicle was driven by a person not included in the CASCO policy.

Franchise for individual elements of the car

A franchise for individual elements of a car is one of the types of physical franchise that applies to certain parts of a vehicle. For example, imagine that such a franchise is established for elements of paintwork. No refunds will be given in the event of damage to the vehicle's paint.

Installation franchise

The installation franchise is used quite rarely by companies. The condition for its accrual will be the refusal of the vehicle owner to stick a special sign on the windshield when concluding a CASCO agreement.

As you can see, there are a huge number of deductibles, but each of them implies exemption of the insurer from paying part of the loss. What franchise in the CASCO agreement will help you save? The best option and the most popular among vehicle owners is the standard unconditional franchise. But due to its diversity, everyone chooses the conditions of use depending on their needs and capabilities.

Franchise in insurance: what is it in simple words, main types

A civil contract includes certain conditions. The insurance deductible is prescribed in the agreement of the same name and assumes that in the event of an insured event, the contractor will not compensate for the damage for the customer within the limits of a certain monetary payment, i.e. The insurance franchise exempts the insurer (reinsurer) from indemnifying a certain amount of losses of the insured (reinsurer).

The use of a franchise in 2019 has a legal basis. In particular, this is N1415-1 Federal Law of 1992. It was amended five years ago. According to the amendments, the benefit began to be applied officially, although it had already been used in practice before. This statement is supported by judicial practice, in particular by Resolution of the Supreme Court of the Russian Federation N20 of 2013.

What is an insurance deductible in simple words? This benefit, which is fixed in the agreement of the same name, allows for a downward change in the price of the insurance policy. The classification of types of franchises takes place according to the terms of the insurance contract.

Conditional and unconditional deductible in insurance

What is an unconditional deductible in insurance? An unconditional deductible represents compensation for part of the losses by the insurance company minus the cost of this very unconditional deductible, abbreviated as BF. Example below.

A conditional deductible in insurance is a benefit, the amount of which is specified in the contract. If the damage is less than the amount stated there, the insurer will not reimburse anything. If more, it will be reimbursed.

Cases for reimbursement of benefits:

The damage does not amount to 20,000 rubles. If damage is caused in an amount less than 20,000 rubles, the insurance company does not owe anything.
If the damage is more than 20 thousand rubles, payments in its amount are transferred under the policy.
The benefit is valid for the duration of the contract and is retained in all cases.

Second example in the picture:

Two options (based on the value of the property) for reimbursement of the insured amount:

The price of the object is 300,000, the damage caused was 280,000, the losses are compensated;
The price is 300,000, the damage caused is 350,000, but of this money, 300,000 will be reimbursed by the insurance company, and the car owner will have to look for 50,000.

Temporary: determines the procedure for covering losses. But the time frame during which the policyholder loses the right to compensation payments is important.

Dynamic: The amount withheld from the insurer depends on certain circumstances. For example, the car was involved in an accident for the first time in a year. Damage is compensated. But if this happens one more time within a year, then the owner of the car now covers the damage.

High: used when insuring expensive property. The price of the benefit is 100 thousand dollars. If an insured event occurs, the damage is subject to compensation in full. After the property is put in order, the excess amount is reimbursed by the policyholder and transferred to the insurer.

Preferential: the concluded contract specifies circumstances that exclude the payment of insurance compensation by the insurer. Insurance payment will not be made if the accident is not the policyholder’s fault, but the second driver’s.

Recourse: the insurer pays the amount of damage, but subsequently the deductible is returned to the insurer.

Example: Someone else’s car was damaged in an accident. The amount of property damage in monetary equivalent is 15,000 rubles. The amount of the recourse franchise under the agreement is 10,000 rubles. The insurance company pays 15,000 in the sum insured limit. Then she makes a financial demand from the policyholder to pay her 10,000.

Other types of franchise

Aggregate has two features: payments are reduced by amounts already paid by the insurance company. And their size is proportionally reduced to the remaining limit.

Example: The price of a car under a CASCO policy is 500,000. 31 days after purchasing the car, the owner gets into an accident. According to the insurance company, the damage was 100,000. So, the limit decreased when compensation was paid by 20%, therefore, it is already 400,000. If a person gets into an accident again, for example, for 40,000 damage, he will be paid 80% of the compensation , that is, 32,000. And from the limit of 400,000, the full cost of compensation will be subtracted: not 32,000, but 40,000. The limit is gradually reduced after each accident and insurance payment due to accidents. When the limit is equal to 0, the policy loses legal validity. You must repair your car at your own expense.

A non-aggregate deductible or non-aggregate insurance amount, fixed in amount, is equal to the full cost of the insured car. The limit does not decrease with each accident, the number of payments is not limited. But there is a maximum limit on the amount of payment: it does not exceed the amount for which the car is insured. Therefore, the owner will receive compensation for each accident.

Example: A car was valued at 400,000. Its owner gets into an accident and receives 250,000 as compensation. In the next accident, he will receive compensation only within the limits of the insured amount, even if the damage will be many times greater.

Interesting fact! The non-aggregate franchise is more expensive than the aggregate franchise. The policy is recommended for owners of cars, which, according to statistics, are most often stolen. And also for drivers with little experience.

These are all known types of deductibles in insurance.

Features of insurance with a franchise

An insurance contract with a deductible is almost no different from an agreement concluded without this benefit. With one caveat: the franchise agreement must specify its type, as well as its conditions.

Interesting fact! If the car was purchased on credit, some insurance companies do not insure cars with a deductible.

The size of the benefit varies. It varies from 10,000 to 75,000 thousand rubles. The client of the insurance company has the right to independently decide what size to include in the contract. But one rule always applies: the higher the deductible, the cheaper the policy.

Pros and cons of insurance with a franchise:

the car owner has the opportunity to save money when purchasing a policy;
in case of minor damage to the car, you do not need to go to the insurance company, quickly prepare documents, and in case of refusal to pay, contact the judicial authority;
The benefit is suitable for drivers with extensive experience.

Disadvantages of insurance with a deductible:

in the event of several accidents, the damage for which will be less than the deductible specified in the contract, payment for minor repairs will come from the car owner’s pocket, the cost of the policy is not refunded, accordingly, there is a double overpayment for both the repair and the insurance itself.

With CASCO insurance

What is a deductible in CASCO insurance? The deductible in this case also represents a certain amount of money that will not be paid to the policyholder if an insured event occurs. CASCO is an optional policy. But car owners buy it, since the insurance has an expanded list of insured events. For example, theft, death, various types of damage. The use of this benefit is not relevant for all drivers, for example, if the insurance company does not pay for minor repairs, the benefit is unprofitable for beginners, since they often become involved in small accidents. No one can force a person to enter into an agreement with a franchise. Based on this, the question of its benefit in each specific case is decided by the car owner.

Cost of a policy with a deductible

The costs of a policy with a CASCO deductible depend on the following indicators:

person's age;
driving period;
car characteristics: year of production, model, make;
expected discount size when purchasing CASCO insurance, etc.

Interesting fact! If the driving experience is decent, and the number of accidents is small, then the amount of the benefit for the policyholder is reduced. Those. upon the occurrence of an insured event, the policyholder must compensate himself for a smaller amount. If a driver just gets behind the wheel and often gets into accidents, it increases. This is how insurance companies protect themselves from costs that most often occur due to accidents with inexperienced drivers.

How to calculate the cost of a franchise? For example, the contract states that the amount of the unconditional deductible is 30% of the amount of damage. If an insured event occurs, the losses from which are estimated at 50 thousand rubles, payments will be: 50,000 - 50,000 * 30% = 35,000 rubles.

Conclusion

One way to reduce the cost of purchasing optional insurance is a deductible. If the amount of damage is not high, the car owner can repair the vehicle himself, without having to come to the customer and not waste personal time. But for beginners, there is a well-founded risk of being left at a loss by purchasing a policy at a reduced price due to the presence of a franchise clause in the contract. Whether or not to indicate it in the contract with the insurance company is the personal choice of each driver.