The deductible indicates the amount of the reimbursement that is not charged to the insurance company, but in this case it is the driver who covers the damage. When you take out a new policy, you can decide to add a deductible, which has a fixed amount that will remain the same for the entire duration of the contract.
In these cases, the amount of the insurance premium falls, but in the event of an accident, it may happen that it is the holder of the insurance policy who has to put his hand to the wallet for compensation for damages. This depends both on the amount of money provided as a deductible and on the type of deductible that will be applied.
In fact, there are two different types: the relative and the absolute deductible. Let’s see in detail what the differences are, in order to choose the one that best suits your needs.
The relative deductible
When it comes to the relative deductible, in the event of a claim, the indemnity can be charged to the insured or the insurance company.
In particular, if the compensation is equal to or less than the deductible, the insured person will have to pay the damages. On the other hand, when the compensation is higher than the expected deductible, the damage will remain the responsibility of the insurance.
This way of spreading the risk is very convenient for the policyholder. Against a saving on the insurance premium, he is required to pay only the slightest damages out of his own pocket, while the most serious ones are compensated by the insurance company, within the limits set by the ceiling.
To explain well how the relative frank works, it may be useful to give an example. If the amount of the deductible is 500 euros and the damage to be compensated is 300 euros, the latter must be fully compensated by the policyholder.
The situation is different if the damage was 600 euros. If the deductible is always 500 euros, as in the example above, the insurance will be responsible for the compensation in favor of the injured party.
The absolute deductible
With the absolute deductible, the damage is always compensated by the insured but limited to the amount of the deductible. Also in this case an example can help to understand if this solution can be convenient or not.
Let’s assume that the absolute deductible is 400 euros. If the damage is equal to 300 euros, also in this case the reimbursement is borne by the contractor, who will have to pay the corresponding amount.
If, on the other hand, the amount to be compensated is greater than the deductible, for example, 600 euros, the insured person will have to pay only part of the damage out of his own pocket, i.e. the 400 euros of the deductible, while the remaining 200 euros will be borne by the insurance company.
This solution is undoubtedly less convenient, so it is good to carefully evaluate the conditions and the pre-contractual information and every other aspect, from the savings on the policy, to the ceiling, to the amount of the deductible.
Difference between deductible and overdraft
Often there is confusion between deductible and overdraft, but in reality, they are very different things. The customer, at the time of signing, has the option of adding ancillary guarantees to the RCA insurance contract.
The most used in recent years is the theft and fire policy, the policy, the one that covers vandalism, and the glass policy, which offers a particular guarantee in relation to specific damages.
The overdraft represents the percentage of the damage that remains to be borne by the insured. The fact that the figure is expressed as a percentage and does not have a fixed amount can sometimes generate a bit of confusion because it is not possible to know how much the contractor will pay if you do not know the amount of the damage.
If you have taken out a theft and fire policy, for example, an overdraft of 30% can be expected. In the event that the owner suffers the theft of the vehicle and this has a value of 100,000 euros, the overdraft is known already at the start and corresponds to 30,000 euros.
The calculation of the overdraft is more complex in the case of the guarantee. If the overdraft is equal to 30% and the motorbike is scratched due to an exit from the road, when the damage caused amounts to 1,000 euros, the motorcycle insurance will pay only 700 euros, while the insured person will pay the remaining 300 euros.
In the latter case, it is not easy to predict the amount of the damage, but at the time of stipulation, only the threshold beyond which the policyholder will have to bear the damage is known.
The bonus-malus benefits of the deductible
As we have seen, the main advantage of the deductible is the savings on the insurance premium, but it is not the only one. When an accident occurs, but the damage caused is less than the value of the deductible, the bonus-malus formula does not apply, so no trace of the accident will remain on the driver’s risk certificate.
In these cases, the pejorative update of the merit class will not be triggered and the driver will not suffer an increase in the amount to be paid for car liability insurance. The risk certificate, which IVASS supervises, will not undergo any changes.
Another factor to consider when choosing whether or not to add a deductible to the contract is therefore represented by the possibility of not undergoing an increase in the class of belonging in the event of accidents and of avoiding a stain on one’s insurance life.
When is it convenient to add the deductible?
We have already given some indications for choosing insurance with or without a deductible, but we want to give some more advice, so at the expiration of the policy and at the time of renewal, it will be easier to understand when it is convenient and when not.
The deductible is never mandatory and can never be applied by tacit renewal. It can undoubtedly be a smart way to save, but before choosing a quote you have to do the math well.
If it is your own car, the calculation of the estimate is a good starting point for evaluating insurance contracts, but the rights of the insured must also be taken into account if the policy also provides legal protection and all the factors that affect the price. Providing a lower deductible can also be a good compromise solution.
Even in the case of insurance with a deductible, all the rules envisaged for the other RCAs apply. For example, the insurance certificate should no longer be displayed, because the police can identify and consequently report the tax evaders after a quick check on the license plate.
The deductible in case of car rental
When it comes to a rental car, adding a deductible is a very common practice. Some rental companies offer flexible and affordable solutions, such as the ability to pay a surcharge for each rental day in order to cancel the excess, while others allow you to add an option that provides for the refund of the excess.
How to choose between the various solutions? The answer depends on the driver’s driving style and also on his risk tolerance. Some drivers feel more comfortable canceling the deductible, while others are very cautious and do not feel this need.
If the renter does not offer a solution in line with their needs, it is always possible to change the rental company and ask for another quote. At the time of rental, you must always bring your driving license and credit card with you and you must be well informed about the need for the Green Card in case you travel abroad.
