Insurance franchise. In what cases is it better to refuse insurance with a deductible? There are two types of franchise

Going to an insurance company to insure a car against damage and theft, each car owner should familiarize himself with the term "franchise", which insurers love to include in the CASCO contract. In order not to be misled by professionals from marketing and insurance, arm yourself with objective information.

Most often, insurance agents talk about the benefits that the client will receive by agreeing to include a franchise in the policy, and forget to provide the insured with full information about all the nuances that he will encounter. Therefore, do not blindly trust the words of insurers. Our review will tell you about the pros and cons of the franchise, giving the insurer the opportunity to make the right choice on his own.

What is a franchise?

A deductible is a sum of money that will not be paid to the insured in the event of an insured event. It can be expressed in absolute terms - rubles, dollars, or a percentage of the sum insured under the contract. The deductible, as well as its size, is predetermined in the CASCO insurance policy by agreement between the client and the insurance company.

By agreeing to include the franchise in the contract, the policyholder receives a discount on the cost of the CASCO policy. There are two types of deductibles: conditional (non-deductible) and unconditional (deductible).

Conditional (non-deductible) deductible means that all payments exceeding its size are fully compensated by the insurer, and in this case it is not "deducted" from the amount of insurance compensation. However, if the restoration of the car after a minor accident or illegal actions of third parties requires a small amount within the conditional deductible, the insurer will not pay anything to the beneficiary. This means that with a conditional deductible of 10,000 rubles, damage that requires up to 10,000 rubles to repair will not be restored at the expense of the insurance company. At the same time, if the amount of damage is 12,000 rubles, that is, if it exceeds 10,000 rubles, the insurers will compensate it in full. In fact, this option is almost ideal for the insured, but at the same time, it is not so beneficial for insurers. Therefore, the conditional deductible is rarely used in auto insurance contracts today.

Unconditional (deductible) deductible always deducted from the payout amount. In any insured event, the beneficiary will receive compensation from the insurer minus the unconditional deductible established in the contract. In other words, an unconditional deductible of 10,000 rubles means that all insurance payments under the policy will be made each time minus 10,000 rubles. It is more often used by insurance companies, as it is more profitable for them than conditional. The deductible deductible is less attractive to unscrupulous insurers who want to deceive the insurance company.

Before deciding whether to include a deductible in an insurance contract or refuse it, you need to understand what practical role it will play for you.

Benefits of franchise insurance

Considering that the conditional (non-deductible) deductible has not found wide practical application in CASCO agreements among Russian insurers, it is worth talking about the features of the unconditional (deductible) deductible. As a rule, representatives of insurance companies do not even talk about the type of franchise, using the word "franchise" without any additions, while they mean an unconditional franchise.

There is no single answer to the question of whether a franchise is beneficial to a car owner. It depends on the specific situation, in which the needs, opportunities, driving experience of the insured and other nuances play an important role. Depending on them, a franchise can become an advantage or disadvantage of an insurance contract. To begin with, let's find out what positive aspects are fraught with an unconditional franchise.

Savings on a voluntary car insurance policy. When an unconditional deductible is included in the policy, its cost can significantly decrease for the insured. In this case, there is usually a dependence - the larger the deductible, the cheaper the insurance policy (you can estimate the cost of insurance for different franchises on the online Casco calculator). However, having included a deductible in the policy, you should be prepared not to apply to the insurer for payments for minor damages, but in case of serious insured events, receive compensation minus the deductible amount. For example, if the sum insured under the CASCO agreement is 500,000 rubles, any payment for you will decrease by 7,500 rubles with a franchise equal to 1.5%. In this case, any losses within this amount will not be compensated to you in principle.
Saving time due to the refusal to apply to the insurance company for minor insured events. Concluding an insurance contract with a franchise can be an advantage for those who do not plan to contact the insurance company for every scratch and small chip on the body. Most often, when an insured event occurs, the insurance company needs to provide a certificate of an accident from the traffic police or a document on illegal actions of third parties from the police department, fill out several applications, and provide a car for inspection by experts. These actions require a lot of time, effort and nerves, especially considering the possibility of waiting in lines at each office. By establishing a franchise, the insured automatically wins the time that he would have to spend on paperwork in cases where "the game is not worth the candle."

In what cases is it worth insuring with a franchise?

Before including an unconditional deductible in the contract, you need to make sure that such a decision will not nullify all the benefits of your CASCO insurance. Some drivers should not even think about a franchise, while for others it is a tempting and profitable offer. If, after reading the following points, you understand that they are directly related to you, a franchise may be beneficial to you.

The availability of free funds for the independent implementation of minor repairs. By including a small deductible (0.5-2 percent of the cost of the car) in the CASCO contract, the insured must be financially prepared to repair the car on his own in case of minor damage. It should be noted that the money saved when buying CASCO on a franchise, as a result of the discount received, will just be spent on minor repairs. However, according to the theory of probability, an insured event may not occur during the term of the contract. Then the savings on CASCO is obvious.
The presence of a long experience of accident-free driving and confidence in driving skills. If the policyholder's driving experience is more than 15-20 years, he feels like a fish in water while driving, then the deductible established in the CASCO insurance contract will not be superfluous, and, most likely, will help save money. The probability of an insured event always exists. However, if the driving style of the insured is safe and this has been proven by many years of positive experience, the franchise most often helps to save part of the budget due to a significant discount on CASCO, and at the same time feel protected from car thieves and major accidents on the road.
The desire to insure the car only at the risk of "Theft". Full CASCO includes two risks: "Damage" and "Theft". If the policyholder initially planned to buy a policy only against theft, since he is confident in his driving skills and does not attach importance to minor damage to body elements, then a good alternative solution would be to issue a full CASCO with a large deductible (7 or more percent of the cost of a car) by the risk "Damage". Not all companies can insure a car only against theft, so insurance with a large deductible is an option if you do not want to change your insurer, but at the same time it does not insure cars only against theft. In addition to the theft protection, a policy with a large deductible will help you receive compensation in the event of a tatal (complete loss of the car) or major damage as a result of an accident.

In what cases should you refuse insurance with a deductible?

According to the practice of settling insured events, the deductible is unprofitable for those who, according to statistics, get into an accident more often than others and apply to the company with an application for payment. As a result, the initial savings on the cost of CASCO turns into multiple unforeseen expenses for car repairs. Young drivers and anyone who is insecure behind the wheel can lose out on deductible insurance protection. Those drivers who are just starting their journey behind the wheel of a car often do not need to issue a CASCO with a franchise. It is safer to pay the insurance company for the policy the full price, taking into account all the multiplying factors and be sure of your insurance protection. As practice shows, minor accidents can occur with inexperienced drivers several times a month. This is especially true for drivers - women and men who have received a license after 40 years. With an increased risk of insured events, it is better to calculate CASCO at the full rate.

So, a small unconditional deductible (0.5-2% of the cost of a car)- ideal for experienced drivers who, most likely, will not contact the company about minor repairs or consider that it is more profitable to carry it out on their own in order to avoid paperwork. Large unconditional franchise (more than 7%) will be useful for policyholders who want to protect their car from theft, total (total loss) or serious damage in an accident. You should not blindly trust the advice of insurance agents on the inclusion of a deductible in the policy (better read the CASCO rules and

What is a deductible in car insurance? - a common question among people who want to profitably insure the vehicle. The franchise 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.

Franchise in insurance - what is it in simple words?

A deductible is a release of an insurance company from compensating part of the losses under an 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 indicated amount, is borne by the insured. If the amount of damage is greater, then the insurance company pays for the repair.

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. Prior to the entry into force of the amendment, the franchise was also applied in practice. This is confirmed by the 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 insured if the damage is less than the agreed amount.

Pros and cons of franchise insurance

Deductible insurance has its advantages and disadvantages.

The pluses include:

Saving time. In case of minor damage, the policyholder may not apply to the insurer. When an insured event occurs, it is usually required to provide a certificate from the traffic police about an accident or from the police department about initiating a criminal case, allocate time for the vehicle to be inspected by an employee of the insurance company, and fill out several applications. Busy people give up this paperwork in favor of work.
Discount on 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 in excess of the agreed amount. Depending on the type, the damage is paid in full or minus the deductible.
Provision of a discount when renewing the insurance contract. In case of accident-free driving, the client may be provided with an additional discount for issuing a CASCO policy.
Saving money. Firstly, getting a discount when taking out an insurance policy, and secondly, with accident-free driving, 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 an accident. Such citizens will have to constantly spend money on both minor and major repairs, since for the most part the franchise is unconditional.

Types of franchises 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 the reimbursement of part of the losses by the insurance company minus the cost of the BF (unconditional deductible).

For example:

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

Another example is franchising 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%.

Conditional

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

For example, the franchise amount is 15 thousand rubles:

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

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

Temporary

The temporary type of franchise is characterized by the use of a unit of measurement - time. The insurance is paid out if the circumstances capable of causing an insured event last longer than the set 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 am to 6 pm, then if an insured event occurs at 9 pm, insurance will not be paid.

Dynamic

Dynamic - this is a type of BF, characterized by compensation for losses not from the first insured event. If during the period of time established by the contract the vehicle has got into an accident once, then the compensation is carried out in full. In subsequent times, part of the costs is transferred to the insured.

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 \u003d 20,000 - 10,000. In the event of a repeated accident with damage exceeding 10 thousand rubles, insurance payments will decrease by a certain percentage. For example, (20,000 - 10,000) * 10% (reducing factor) \u003d 1 thousand rubles (the amount of insurance payment for careless driving will decrease so much). This type of franchise encourages drivers to drive carefully.

High

High is a type of franchise used for insuring objects with a high cost. 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 restoration of the property, the policyholder reimburses the insurer for the amount of the deductible.

Preferential

The concept of "preferential" implies the inclusion in the contract of conditions that exclude the payment of insurance compensation. For example, a refusal to pay in case of guilt not of the insured, but of another driver.

recourse

Recourse - payment to the insured of the amount of damage with the subsequent return of the deductible. For example, in the event of an accident, damage was caused to someone else's car in the amount of 15 thousand rubles. The recourse 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 submits a recourse claim to the insured in the amount of 10 thousand rubles.

Advantages:

reduction in the cost of the OSAGO policy;
compensation for damages in full;
making payment not by the insured, but by the insurer;
an incentive for accident-free driving, since part of the payment for losses is borne by the insured.

Flaws:

reimbursement of part of the losses in the amount of the franchise;
the costs of conducting cases in court in the event of an insurer applying with recourse claims;
burden on the judiciary as a result of late payments.

What is a CASCO franchise?

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

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

saves on the issuance of the policy;
with accident-free driving, there is no additional cost required for the elimination of minor repairs.

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

have many years of accident-free driving experience;
interesting offer for car insurance against theft;
there are free means to eliminate minor damage;
absence of a multiplying coefficient for insurance in case of accidents.

As a rule, the contract provides for an unconditional franchise. This means that in the event of an insured event, the damage that is higher than the agreed amount will be reimbursed by the insurance company in full, minus the cost of the deductible. For example, the cost of the 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 amount of the franchise depends on the parameters set in the contract. For example, the contract states that the amount of the BF is 20% of the amount of damage. In the event of an insured event, the losses from which are estimated at 20 thousand rubles, the payments will amount to 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 insured is willing to spend on minor repairs;
model and characteristics of the car;
driving experience;
the desired discount when applying for CASCO, 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 equal to 1 million rubles. BF is equal to 100 thousand rubles. 1 million - 100,000 \u003d 900 thousand rubles, the insurance company will reimburse for repairs.

A franchise 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 on the inclusion of a franchise in the insurance contract.

In the case of insurance, a deductible is one of the additional options. It allows you to reduce the cost of agreements by introducing additional numbers.

But is franchising worth it? Each insurance company has its own conditions and services for customers in this area.

For the insurance industry - one of the special conditions in the contract. It provides that the insurer is exempted from paying compensation to customers, in a specific amount.

A certain amount for the condition is chosen by the client himself, and it is called the deductible amount. You need to look at the main characteristics to make it easier to understand:

Benefits are maximized by those who avoid the occurrence of insured events.
According to the requirements, registration is acceptable not only for cars, but also for any other types of property.
The franchise often refers to a kind of incentive for drivers with careful driving.
During an accident, minor damages that occur are covered by the client at his own expense. This applies to losses with a value lower than the deductible.

The main advantage of a franchise is associated with insurance premiums. The name of the award was given to the amount by which the deductible is reduced. A person saves a significant amount of money if he chooses this condition, and then drives very carefully.

Contracts with different companies take place on different terms and conditions. You need to carefully study the requirements before signing the agreement. Otherwise, it will be, on the contrary, unprofitable.

Unconditional deductible in insurance

What is this? This is a classic version of reducing part of insurance payments by a specific set amount. That is, it is money that is deducted from the total remuneration. Conditions with these circumstances often accompany CASCO contracts.

Imagine that the size of the franchise, according to the contract, is 10 thousand rubles. When an insured event is registered, a total amount of compensation equal to 30 thousand is assigned. The client receives only 20 thousand.

About Increasing Unconditional Franchise

In this case, the determining factor is how many times an insured event occurs during a particular period. For each accident, certain figures are deducted from the total amount.

Features of the provision

Size refers to the most important features and conditions of such agreements. It is determined individually, for each specific person.

There are several indicators that affect the size of the franchise the most:

The complexity of the repair.
The cost of individual parts of the transport.
Price for the whole car.

For example, it makes no sense to draw up a franchise agreement, the cost of which is only 1 thousand rubles. After all, usually car repairs and the purchase of additional parts require high costs, sometimes not limited to five-digit numbers.

More often, the minimum amount of franchises is at the level of up to 10 thousand rubles. Sometimes they take a certain percentage of the total cost of the car.

The CASCO agreement will be the cheaper, the higher the established interest. One of the key features of this direction is the inability to avoid the use of franchises when it comes to old cars. Especially if their age is more than three or four years.

Typically, contracts are concluded when it comes to one of the following risks:

Complete structural failure.
Theft or theft.

The franchise is also becoming a prerequisite for new cars produced 3-4 years ago.

Additional factors affecting the cost

There are also other characteristics on which the cost of a franchise depends directly:

Location, storage conditions of the car.
The presence of such structures as an anti-theft system, satellite navigation, and other similar additional equipment.
The presence of accidents, payments for compensation over the past 1-2 years.
The number of persons who can drive the vehicle.
Age and experience of the driver.

The age of drivers allowed to drive, together with the length of service, most of all determines the result of the deductible amount.

The cost of contracts increases as age and seniority decrease. The same applies to the minimum franchise amount. This is necessary for insurance companies so that they can insure themselves against additional risks.

The more people are allowed to drive, the less likely it is that the ride will be accident-free for a long time. Many companies double the multiplier if more than two people are allowed to drive.

Insurance history is also important for solving such issues. Especially often take into account one year preceding the execution of the contract. Experts look at the total number of accidents, the frequency of claims for insurance payments.

The better the vehicles are protected, the cheaper it will be to get insurance using the franchise.

Important differences from other types of franchises

There is both an unconditional and a conditional type of franchise. Each of them has its positive and negative sides. The contract requires an indication of the amount that is paid by drivers from personal funds.

The obligation to pay the amount of money from insurance companies arises only if the amount of damage exceeds the amount of money for which drivers pay on their own.

Conditional and unconditional franchises differ in that the occurrence of an insured event leads to full coverage of expenses by the insurer. Such circumstances lead to the fact that there are no deductions on the part of the driver, other possible types of losses. The total cost of CASCO agreements is less dependent on conditional franchises.

An unconditional franchise allows you to receive discounts of up to 10-15 percent. That is why most vehicle owners choose this variety.

CASCO franchises: which option is better?

When concluding an agreement, clients can count not only on conditional and unconditional franchises, but also on additional varieties:

Preferential.
Dynamic.

A dynamic franchise means that the occurrence of each new insured event leads to an increase in payments.

The first accident does not lead to any payments from the company. At the second, 50 percent of the damage is covered from her funds. With the third, compensation already reaches 75 percent. Each organization has its own conditions in this area.

The conditional franchise is worth paying attention to those who have extensive experience in accident-free driving.

When is the best time to choose deductible insurance?

Franchises are representatives of a group of bilateral concepts. For some drivers, this is ideal. For others, on the contrary, such agreements lead to complete financial insecurity. The owner of the vehicle will get the maximum benefit if the following conditions are met:

Availability of available funds. This means that minor repairs are easy to do on your own without the help of insurers.
Recurring accidents.

The insurance company may increase the coefficients on the cost of the policy for those who periodically become a participant in or the culprit of accidents on the road. But the franchise condition contributes to additional protection against such risks.

Significant experience without accidents.

The franchise condition is especially beneficial for those who try to drive as carefully as possible. The cost of the policy is lower, and accident-free driving allows you not to spend your own money on vehicle repairs. Minor bugs need to be corrected.

The need to get protection only from theft.

It is also the best option for those who want to save money, but do not plan to give up the franchise at all.

When is it better to refuse such conditions?

This will be relevant for drivers who often find themselves in an accident, and who have to wait until compensation is received and calculated. There will be no promised savings, only fixed personal expenses associated with the repair of the vehicle. Then it is better to immediately pay the policy in full. And be sure that in the event of an insured event, compensation will be received in full.

Insurance with a deductible will be the least profitable for the following categories of citizens:

Inexperienced drivers who are more likely to have minor accidents.
Those who were first issued a license after reaching the age of 40 years.
Citizens who have taken out a loan to obtain a movable. Insurance for the client will be more expensive if it turns out that the car is in collateral.

Driver actions in case of an accident

The motorist applies to the insurance company in the usual manner if, when using CASCO with a deductible, the amount of damage is greater than the amount of the deductible. The standard procedure for paperwork is used, according to which insurance is obtained under any other circumstances.

The insurance company pays compensation if, after an accident, the car is immediately sent for repair. The main condition is the transfer and reimbursement of the franchise amount by the client, on time, which was agreed in advance. This means that the client in any case parted with part of his money. The situation is simplified only due to the fact that the second party assumes all the costs, the performance of the repair work itself.

About the aggregate variety

This type of agreement is annual. The main difference is that the amount is set not for each insurance situation separately, but for the totality of various cases that occurred over a certain period. The amount of compensation depends in this case on how the amount was originally established.

Sums insured can combine aggregate and non-aggregate characteristics. The amount of total payments is limited for the entire period while the agreement is in effect, in the case of the aggregate option. If compensation occurs after the occurrence of an insured event, then the next time the amount is reduced.

Additional features and conclusion

Temporary franchises are an offer from insurers that have recently appeared on the service market. This becomes a guarantee of payment deferrals for some time. This period is enough to earn at least initial capital. Then the drivers receive compensation from these funds.

According to the agreement, such franchises may not belong to conditional or unconditional categories. It is automatically classified as a conditional variety. Damage will be reimbursed in full.

The dynamic type of franchises is also found in a number of companies. This means that the amount of compensation varies depending on the number of accidents. The method brings maximum benefits only to insurers. They cover their own risks. And drivers, on the contrary, face additional costs from their own funds. It is for this reason that it is worth carefully studying the texts of the agreements being drawn up.

Insurers try to take into account the riskiness of the transaction and any actions performed with this or that property. Therefore, each company has its own approach to determining the amount of compensation. In car accidents, every thousand dollars earned counts.

The model of payment of the total compensation amount is determined separately by the contract.

The emergence of franchises has led to the fact that the insurance itself has become more affordable for ordinary citizens. The cost of insurance becomes less when using any products on the market. The result is especially noticeable when concluding CASCO agreements. Even franchising by 1 percent leads to a significant reduction in the cost of the contract.

An interesting video on how not to pay predatory CASCO for the second and subsequent years:

Oct 22, 2017 Benefit Help

You can ask any question below

Car insurance under CASCO is becoming more widespread, especially in cases of purchasing a new car through car dealerships. This fact is due not only to the convenience of the insurance service itself and its cost, but also to the fact that banks issuing a car loan make it a necessary condition for obtaining compulsory CASCO insurance of the purchased car for the entire lending period.

Despite many of its advantages, this type of insurance retains its main drawback, which is expressed in its high cost for the average consumer. The average cost of an annual CASCO policy is about 10% of the price of a car, which is a fairly substantial amount with a constant upward trend in prices for new cars. This alone holds back most motorists in an effort to insure their car against various risks.

Against this background, more and more car owners are beginning to be interested in what is a franchise in car insurance in a general sense, and more specifically, what is a franchise in CASCO insurance . This service provides the buyer with an opportunity to receive a significant discount on the purchase of an insurance policy. How profitable it is, when you can use this service and how to pay for it - we will try to find out these questions in the following material.

What is a deductible for car insurance under CASCO?

A franchise, as a way of providing benefits for doing business, has found its application in the insurance system. So in CASCO, the use of a franchise is such an insurance option when, for providing benefits for purchasing a policy, the client insuring his car (franchisee) must assume a certain share of the costs of restoring a car damaged as a result of an insured event. Thus, the insurance company (franchisor) reimburses the sum insured not in full, but only in part.

To make it more clear what a deductible is in car insurance for CASCO, the following example can be given. Let the client decide to insure his car, the price of which is 500,000 rubles, against accidents under an unconditional franchise in the amount of 20,000 rubles. Then, under the terms of the contract, when assessing the cost of damage caused as a result of an accident in the amount of up to 20 thousand rubles, he is obliged to restore the car at his own expense and insurance will not be paid. If the repair cost is estimated at 70 thousand rubles, then the insurance company will pay only the amount that exceeds the established threshold, i.e. 50 thousand rubles, and the balance of 20 thousand rubles. the client pays.

Video: Casco insurance franchise

So, the main idea of a deductible for CASCO insurance is as follows: the greater the amount of the deductible threshold set, the greater the benefit provided to the client when purchasing a policy. In this case, the franchise threshold can be defined as:

specific amount;
percentage of the value of the car;
or the value of the damage caused to him as a result of an insured event.

The amount of the discount provided for the purchase of a policy in each insurance company can be set individually and vary greatly, but mainly it is determined in the amount of double the amount of the deductible threshold.

Franchise options for CASCO insurance

There are several main types of franchising in CASCO:

1. Conditional franchise

The meaning of this insurance option is to set a fixed amount of damage caused in the event of an insured event. If the damage incurred does not reach the established threshold, then the policyholder fully restores the car at his own expense. If the damage assessment showed that the cost of the repair exceeds the established threshold, then the restoration is fully paid by the insurer, and the insured does not take any part in financing the repair.

For example, if a CASCO agreement is concluded under a conditional franchise with a threshold of 5,000 rubles, then in case of a minor accident with damage of 4,900 rubles, the owner of the car pays for its repair from his own pocket. If the damage is estimated at 5100 rubles, then the restoration of the car falls entirely on the shoulders of the insurance company.

The conditional franchise option is undoubtedly a profitable form of car insurance for the car owner, but in practice it is quite rare. This is due to the fact that in this option, fraud on the part of the insured is not excluded, when he specifically damages the car in order to bring the amount of damage to the limit established by the contract in order to shift the repair onto the shoulders of the insurance company. Therefore, insurers try to avoid such an insurance model.

2. Unconditional franchise

This insurance option involves the mandatory participation of the car owner in its restoration by paying the full or partial cost of the repair. The part of the restoration costs that is paid by the owner can be expressed as a fixed amount, as a percentage of the value of the machine or the damage caused.

Example: a fixed unconditional franchise for 10 thousand rubles. In this case, if the damage as a result of an insured event is less than this amount, then it is paid at the expense of the car owner. If the damage is greater, for example, 30 thousand rubles, then the car owner will pay 10 thousand rubles, and the insurance company will pay 20 thousand rubles.

The difference between an unconditional deductible and a conditional deductible is that the insured always pays out of his own pocket part or the full cost of the repair, depending on the ratio of the estimated damage and the deductible threshold established by the contract.

When setting the deductible threshold as a percentage of the cost of the car, the depreciation of the car is taken into account. In this case, the deductible amount (a threshold amount determined as a percentage) decreases over time in proportion to the value of the car.

If the CASCO agreement is concluded under an unconditional deductible, expressed as a percentage of the cost of the damage caused, then the owner of the car will pay for a strictly fixed part of the restoration repair in each insured event. For example, with a 10% deductible from damage estimated at 50,000 rubles, the car owner must pay 5,000 rubles to the repairmen, and the insurance company - 45,000 rubles.

3. Dynamic franchise

This insurance option involves taking into account the history of impeccable driving of the insured. The less insured events are listed for the client in previous periods of insurance, the greater the confidence in him on the part of the insurance company, the greater the discounts and bonuses offered for the purchase of the policy. A dynamic deductible encourages policyholders to drive without accidents, since a high percentage of insurance is paid to them only for the first and second insured event, and for each subsequent insured event, the share of insurance compensation is consistently reduced by 5%.

4. Temporary franchise

This insurance option allows the client to choose the time period of the insurance contract. For example, if the owner of the car uses it only on weekdays, then he can conclude a CASCO agreement with a temporary franchise, valid for 5 working days a week. If damage to the car occurs during these days, the insurance company will fully compensate for its repair. If the accident occurs on weekends, the repair is carried out by the owner at his own expense, and the insurance company does not pay insurance. Such a system allows to reduce the cost of the policy for the client in comparison with the standard system.

There may be other franchise options for CASCO insurance. For example, options for providing benefits through a deductible in CASCO provide for the payment of a limited amount of the sum insured only if the insured himself is the culprit of the accident. In this case, the cause of the accident should not be a malicious violation of traffic rules. If the accident in which the policyholder's car was damaged was caused by the fault of another person, then the resulting damage is reimbursed by the insurance company in full, excluding the deductible.

Video: Ways to save on CASCO - Method 1: Franchise

Who benefits from a car insurance franchise?

1. For insurance companies

The deductible allows the insurer to get rid of payments for minor damage to the car when the amount of damage does not exceed the deductible threshold. The essence of saving money and time for the insurance company here is that, regardless of the amount of payments, the insurer has to launch the entire cycle of the bureaucratic mechanism of investigation, damage assessment and financial movement, which requires certain material costs, which in some cases may exceed the amount of insurance payments made. Therefore, it is unprofitable for insurance companies to investigate and pay small sums insured. It is important for them to have fewer insured events with a stable flow of insurance premiums.

2. For transport owners - insurers

Franchise for the insured can be both profitable and disadvantageous. It all depends on the specific franchise insurance options, the experience and qualifications of the driver, the driving mode and many other factors. The benefits of an unconditional franchise for policyholders are:

Saving time and money due to the fact that you do not need to contact the traffic police and the insurance company for minor damage in order to obtain insurance and make repairs. This point applies mainly to the unconditional franchise. These procedures may take too long and additional costs that are not beneficial to the insured himself, and the insurance received may not be worth such sacrifices.
A significant discount on the purchase of a policy, the higher the deductible threshold, the cheaper the insurance policy. Careful accident-free driving will significantly reduce the cost of car insurance compared to the usual CASCO option. For an accident-free driver, insurance companies offer a system of progressive discounts, when the cost of the policy will decrease annually.
Often caused minor damages are not fixed in the history of the insured, and it is considered accident-free. Therefore, a new policy can be purchased at an even greater discount.

Franchise Disadvantages

The main disadvantages of CASCO insurance with a franchise include:

Unavailability of this form of insurance for cars purchased on credit. The fact is that lenders are interested in keeping the value of the pledged car unchanged, but they cannot be sure that the borrower will independently restore various minor damages that reduce the market price of the car. In addition, the cost of the policy for the entire period of lending is paid by the lender, and the franchise is unprofitable for them.
There is a possibility of underestimation of the damage caused by the specialized service centers of insurers in order to avoid insurance payments on the basis that the amount of damage does not reach the deductible threshold.

When is it better to choose insurance with a deductible?

In the presence of finances for the production of minor repairs on their own and means.
Minor accidents with minor damage are common, especially for novice drivers. They worsen the driving history and become a reason to increase the price of the policy for the next year. Therefore, the franchise helps to avoid such a rise in price in cases of minor accidents.
If you have extensive experience and experience of accident-free driving, when the driver is sure that he will not be the culprit of the accident.
A CASCO contract for the risk of damage, concluded for a large deductible amount, may contain insurance against theft, theft or destruction as a bonus, which may be beneficial for a certain category of car owners.

Video: CASCO calculation - cheaper insurance policy through a franchise.

How to calculate the franchise?

To do this, you need to proceed from three main values \u200b\u200bspecified in the insurance contract:

franchise type;
the amount of the franchise;
insurance amount of the contract.

For example, we have the initial data:

sum insured - 1 million rubles;
the deductible amount is 0.5% of the sum insured, which is 5,000 rubles.
If it is given as a percentage of the damage, then let it be equal to 20%.

In this case, two calculation options are possible:

A deductible or conditional type of calculation, when the deductible is deducted from the estimated amount of damage. With a loss of 20 thousand rubles, the insurance payment will be 20,000-5,000 = 15,000 rubles. If the damage is less than 5000 rubles, insurance is not required.
An unconditional type of calculation, when the deductible amount is determined as a percentage of the amount of damage and amounts to 20,000x0.2 = 4,000 rubles. The amount of the insurance payment will be 20000-4000=16000 rubles. The remaining 4,000 rubles is paid by the insured to the repairmen himself.

Thus, the franchise is designed to reduce the cost of the insurance policy and is beneficial to the client when there is a need for car insurance. However, in order to receive insurance in the event of an insured event, you need to keep a “cold head” in order to fulfill all the conditions that are discussed in the contract for receiving compensation.

Franchise (literally translated from French as “benefit”) is the amount that the insurance company does not pay to the client in the event of an accident. It may have a fixed amount or be a few percent of the total amount of damages. Policies with a franchise are sold much cheaper than without it, so many drivers prefer this type of insurance. There is an unconditional and conditional franchise, and it is important to know what is the difference between them, and which type will be more profitable. Let's consider them in more detail.

What is an unconditional franchise

This type of franchising is a fixed amount that the insurance company will not pay in the event of any accident. If the damage is less than the unconditional deductible, the driver receives nothing at all from the insurer; if more, he receives the difference between the damage and the deductible amount.

For example, after a collision, the car received dents, the damage was estimated at 10,000 rubles. The franchise amount under the contract is 15,000 rubles, so the company will not pay anything at all. If the accident turned out to be very serious, and the damage, for example, amounted to 40,000 rubles, the company will pay the difference: 40,000 - 15,000 = 25,000 rubles. This is the amount the driver will receive as compensation for the damage. Another example: an unconditional deductible for the risk of damage of 20,000 rubles, damage is estimated at 19,900 - even with such a minimal difference, the driver will not receive compensation from the insurer.

Such a system is beneficial primarily for the insurer, since he will be able not to pay for minor accidents at all, and, if necessary, to compensate for major damage, receive a large discount. Because of this, some firms do not even offer another type of franchise, leaving the client no choice. However, for the insured person, such franchising can also be quite profitable for several reasons:

The policy will cost significantly less. CASCO for expensive cars is always very expensive, and a franchise will save up to 30-40 thousand. It is worth considering the peculiarity of the Russian mentality: the driver always hopes that he will not get into an accident, which means that it is better to save as much as possible on insurance. In case of serious accidents, it will still be possible to receive a fairly large amount of damages.
You do not need to contact the insurance company with every little thing. The policy is cheaper, and the driver will correct all minor damage to the car in a traffic jam or in a parking lot at his own expense. This will allow, with the mutual agreement of drivers, not to contact the traffic police, not to collect a lot of documents with examinations.
It is possible to save time on car repairs. With a full CASCO policy, any accident can lead to the fact that the car will be sent to the partner service center of the insurance company, and the driver will have to wait for the repair to be completed. Sometimes it is much easier to carry out repairs on your own and not wait for the insurance company to fulfill its obligations.

Thus, an unconditional deductible can be beneficial to both parties, but first of all, it saves the insurance company from unnecessary expenses.

What is a conditional franchise

Conditional deductible - a fixed amount for which damage to the car will not be reimbursed. That is, minor damages that were assessed less than the deductible amount will not be paid by the insurance company. If the damage has overcome this breed, then the insurer is obliged to pay compensation in full. The franchise amount is not deducted.

Calculation example: the contract states that the deductible amount will be 7,000 rubles. The car gets into an accident and gets damaged by 5000. Since the damage is less than the deductible, the driver pays for the repair, not the insurance company. At the same time, if the same car gets into a more serious accident, the damage from which will be estimated, for example, at 15,000 rubles, the insurance company will fully compensate for the repair.

Who would benefit from such a system?

Experienced drivers. They rarely get into minor accidents, the car may not receive minor damage during the entire insurance period, so there is no point in paying for them to the insurance company. A serious accident can happen to anyone, but in this case, major damage will be fully compensated.
For those who want to save money. A franchise will help you buy a policy much cheaper, and minor problems can be solved at your own expense. For example, if you do repairs in a familiar service center, it will cost much less, and savings on insurance will fully compensate for the costs.
For those who save time. You won’t have to call the traffic police inspectors, waste half a day on drawing up protocols for every trifle, you won’t need to conduct an examination about a small scratch on the bumper. The franchise will allow you to receive full compensation when it is really necessary, without overpaying too much.

Should I take out insurance without a deductible at all?

An insurance policy without a franchise at all is very expensive, so it will often be unprofitable to purchase it. For an experienced driver, it most likely will not pay off, and the insurance company will not return the money. Franchising allows you to save up to 30% of the total cost of insurance, and if we are talking about an expensive car, the amount is not at all small. In the West, insurance without a franchise is practically never found, since there is always a minimum damage that is not covered by the company.

Which type of franchise to choose, the driver has to choose on his own. You need to familiarize yourself with the conditions of several insurance companies in advance, look for reviews about them from car owners who actually suffered in an accident.