Not to be surprised, you should know that there is a cost to insurance, known as a premium (the amount you pay to the insurer). However, if you make use of the coverage provided for in the policy, there may be another expense: the deductible.
If you don’t know what it is and how the car insurance deductible works, this post is for you. In it, we will explain how this insurance model works and the different types of deductibles. Come on?
What is the car insurance deductible?
The car insurance deductible is the amount of money you must pay to your insurance company when you call it in the event of an accident. It is a value defined by the insurance company itself and indicated in the policy when the service is contracted.
The deductible, therefore, corresponds to a part of the costs necessary for the repair of the damaged vehicle, for example. However, it does not involve the expenses incurred with towing, spare car and other services offered by insurance companies.
Thus, small repairs often have a lower cost than the deductible. In turn, sharing responsibility for the expenses of a claim can make the driver more careful, avoiding accidents, by driving more carefully.
What types exist?
There are several types of deductibles offered by insurers. There is a tendency to increase the minimum and maximum values reached by this expense.
In general, they can be defined according to the driver’s profile and the type of vehicle insured. Thus, some types are more common and must be observed in all insurance, even in a simple vehicle exchange .
Regular or basic deductible
It is the most common, normally adopted initially in most insurance policies. Each insurer sets the base deductible amount.
extended franchise
In general, it has a value twice that of the basic deductible. On the other hand, the total value of insurance tends to be lower. It is suitable for people who fear the total loss of the vehicle more than partial damage, such as professionals who use the car for work.
Those who hire this type of insurance are willing to bear the costs of repairing the car in cases of accidents with small damages.
reduced deductible
Its value is almost always around half of what the basic franchise would be. In this case, the insurance has a higher cost, as a counterpart.
This type of insurance is best suited for people who prefer to pay a higher policy price than pay for car repairs, even if they are willing to pay for minor repairs.
Franchise exemption
Although limited to some insurers, the deductible exemption tends to make the insurance value much higher than in the case of a normal deductible. In addition, its use has a limit of occurrences.
How does an insurance deductible work?
The car insurance deductible is charged when the damage resulting from the accident is partial. For example, let’s imagine that you have an insurance policy for your car, whose deductible is R$1,000. If there is a crash and vehicle repair expenses total R$6,000, the insurance company will respond for R$5,000.
However, consider that the deductible will be charged if this recovery cost does not exceed 75% of the vehicle’s value. Otherwise, the repair is not carried out and the insurer indemnifies according to the provisions of the policy.
As seen before, the franchise does not involve the assistance services offered. There are also situations such as theft and robbery, occurrences of fire and lightning, as well as the activation of third-party coverage, which may also be exempt.
How to choose the best type of car insurance deductible?
Now that you understand how the insurance deductible works, it’s time to learn how to choose the ideal service for your profile and type of car. Here are some tips on how to make the best choice.
Search for different insurers
There is no shortage of car insurance companies in the market, but not all of them are reliable. So, before hiring an insurance franchise, look for information about the company. To find out about the quality of services, the ideal is to ask friends and acquaintances about the company, in addition to visiting pages on social networks to hear the opinion of other customers.
Analyze your budget
It’s no use wanting to pay high insurance, which offers several benefits, if the deductible does not fit in your pocket. If you hire a service with a very high value, you will have difficulty paying and, if you are involved in an accident with the insurance delayed, you may have problems.
Consider your car model
The repair of a popular car and an imported car has very different values, even in cases of small damage. So, before choosing the best insurance deductible, take into account the value of your car and find out the value of small repairs so you don’t get scared, in case the insurance doesn’t cover the repair of a light crash.
Consider the utility of your car
A person who uses the car for work every day, such as a taxi driver, needs a different insurance deductible than someone who uses the car only on weekends. If the taxi driver suffers an accident that causes serious damage to the vehicle, he will have serious losses, as he needs the car to maintain his livelihood.
In that case, your deductible should cover damages caused by major accidents, otherwise it won’t help much. But a person who takes the car only on weekends doesn’t need it as much, so going a few days without the car is not as necessary as in the first case.
Now that you know how the insurance deductible works and the ways to define it, know that it can make a big difference when hiring insurance for your car. That’s because you can have an accident and have a total loss of the vehicle, but if you have a deductible that covers the purchase of a new car for the same amount, you can have another vehicle at no additional cost to your pocket.