It is very important to understand the meaning of the term “deductible“. It is often heard of in the insurance industry and you need to know what it is for.
Intending to make the language of insurers increasingly transparent, as our article on the advent of DIP also demonstrates, here‘s what to know about the deductible.
The presentation of the tax return to the Revenue Agency is made by the working citizen to report his / her income and expenses: the 730 model is used to do this . This must be completed by declaring the expenses incurred during the year, but also subtracting those that can be deducted .
For example, it is important to know that some insurance policies are deductible , but you must be careful to distinguish which ones are: among these we find some types of life and home insurance policies. The limits of deductibility are variable.
Definition of deductible
To understand what the deductible is, it is good to start from how the experts explain it according to which it is:
“The minimum amount of any damage that remains to be borne by the insured in the event of a claim. Damages that have an amount lower than the deductible remain entirely the responsibility of the insured person “.
Because it exists
You will find the purpose of the deductible to be of interest to you. It serves to keep policy costs low. On trucks, to give a practical example, a policy without a deductible would be high while with this tool the product becomes accessible to most.
When using
In Italy, insurance companies usually apply a deductible in various cases. To understand how ramified this tool is, let’s take the example of the cars where the deductible is applied on:
guarantees for fire and theft;
vandalism;
atmospheric events;
crystals.
Difference between absolute and relative deductible
There are different types of deductibles. To illustrate them, let’s take the example of a sickness and/or accident policy.
Internally, insurance companies use to make this distinction.
Absolute deductible
In this type of deductible, the amount payable by the insured never changes at the time of compensation, whether the indemnity is lower or higher than the deductible.
Here is an example of an absolute deductible. If the deductible is 600 euros:
in case of damage lower than the amount, the customer will have to reimburse all the damage himself;
in case of higher damage, however, the customer will pay only 600 euros and the rest will be up to the insurance company.
Relative deductible
It occurs when you are not entitled to compensation below the deductible amount.
Here is an example of a relative deductible. If the deductible is 600 euros:
in case of damage lower than the amount, the customer will have to reimburse all the damage himself;
in case of higher damage, however, the insurance company will bear the entire compensation.
Now that it is clearer to you what the franchise is, enter our world of L&N De Liguori where each product is explained with simplicity and where our collaborators are always ready to clarify your doubts.
