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The deductible is the car insurance

The deductible is the car insurance

The deductible is the car insurance

Auto insurance can have various rates, depending on the clauses you choose to include.
You can choose between three types of RCA (Motor Civil Liability):

  • with the Bonus Malus system;
  • with a combination of bonus-malus and deductible;
  • exclusively at the deductible.

What is the deductible?

It is a clause in the contract of a policy that indicates the part of the reimbursement of damage, which is entirely borne by the insured. The underwriting of car insurance with deductible provides that the damages are covered in part by the insurance and in part by the insured.

There are two types: relative and absolute.

In-car insurance with a relative deductible, the right to compensation for damage is not granted below a certain amount. For example, if the deductible is 500 euros and the damage caused amounts to 400 euros, the insured person will be required to pay the full amount of the damage. If, on the other hand, it is 500 euros but the damage is greater, so let’s assume 800 euros, then the compensation is entirely borne by the company.

In the car policy with an absolute deductible, the compensation remains the same whether the amount is higher or less than the deductible. For example, if the deductible is 500 euros and the damage is 400 euros, the compensation will be borne by the insured, if instead, the damage exceeds this value, so it amounts to, for example, 800 euros, the insurance reimburses an amount calculated by subtracting the damage to the deductible, so in this case, the customer will only be entitled to a refund of 300 euros.

Relative deductible

If damage is caused in a road accident for those who are insured with a  deductible policy, the part of the reimbursement payable by the insured is called the deductible. This clause is one of the most used in insurance and can be: absolute or relative.

How it works:
If you choose the relative deductible clause, you pay only if the damage caused is lower than the deductible agreed in the policy and if the claim is minor. In fact, the most serious accidents are totally liquidated by insurance.

When it is convenient:
The solution of the policy with a deductible is convenient because it avoids involving the insurance company and does not activate the related bureaucratic procedure for reporting. Through the bonus-malus clause with a deductible, there is also the advantage of avoiding an increase in the RCA premium and in the merit class when causing road accidents.

Absolute deductible

When a road accident occurs, the insurance reimburses the insured customer but, in the case of a  policy with a deductible, part of the damage caused remains at the expense of the customer (deductible). This clause is one of the most used in motor liability insurance and can be an absolute or relative deductible.

How it works :
In the event of a claim, the insurance company reimburses only the part exceeding the deductible. Its value varies from one policy to another. On average it varies from a minimum of 200 euros up to a maximum of 500 euros. It may also happen that some insurance companies indicate the deductible as a percentage of the road accident damage compensation.

While with the relative deductible the reimbursement of the accident is charged to the customer on the basis of the damage caused, with the formula of the absolute deductible the settlement for the insured is obligatory. The choice of the absolute deductible allows great savings on the RCA premium rate, up to 15% less than the relative one.

When it is convenient:
It is therefore advisable to choose an insurance with a deductible only if you have a low incidence of claims in your insurance history. In the event that a policy with a deductible is chosen, it is always good to remember that it will be necessary to provide the insurer with the appropriate guarantees for the return of the deductible.

How much is the deductible?

The price of the motor liability premium is higher in insurance policies with relative deductible and cheaper with absolute insurance deductible since up to a certain threshold the reimbursement is always and in any case at the expense of the insured.

In conclusion, if it is true that the absolute deductible can cost up to 15% less, it is still necessary to check its convenience and be sure to be careful motorists while driving without causing accidents, otherwise, in the event of an accident, the compensation for damages would be very much low.

Exclusion and Revenge: What they are

In Auto TPL insurance contracts, of the Bonus Malus type, there are often two very common clauses, that of exclusion and that of recourse.

How it works:
With the exclusion or recourse clauses, the insurance limits or excludes compensation for the accident and its related damages. The clauses apply only in specific cases indicated in the contract. When one of these events occurs with gross negligence, the company must in any case compensate for the damage but then has the right to retaliate against the insured by asking him for the total or partial refund of the liquidation. The cases vary from one company to another so it is always advisable to read the clauses and cases contemplated under these two items before entering into an insurance contract.
If the insurance company waives the recourse it is likely that the price of the premium will increase and a surcharge will be applied.

When they apply

Among the cases of risk exclusion:

  1. Accidents are caused by the driver while intoxicated or under the influence of drugs.
    According to the  Highway Code,   driving under the influence of drugs includes not only the consumption of drugs or alcohol but also psychotropic substances such as psychotropic drugs.
  2. Driving without a license with non-licensed drivers.
    That is those who could not drive as indicated by the highway code: without a license, with a withdrawn, suspended, or non-renewed license.
  3. Driving of drivers not covered by the policy. It refers to the option whereby the number of drivers in the policy can be indicated to cover them from the risk. Increasing the number of drivers represents a higher risk, therefore it corresponds to an increase in the price of the premium. In this option the extreme limits can be:
    free driving, which allows anyone to drive the insured car, paying a high rate;
    exclusive driving, which provides for the use of the car only by the owner, paying a lower price than the premium.
  4. Non-compliant transport is when there are more people on the vehicle than expected, its load limit has been exceeded, or there are no adequate supports for the transport of children or animals.
  5. Lack of car inspection.
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