When it comes to hiring car insurance, it is common for some application drivers and other drivers to still have questions about what is insurance franchise, how it works, when you pay and how to choose.
Vehicle insurance policies offer franchises that can define the choice of the best insurance. And this can vary according to who you are hiring and the insurer.
So keep with us and learn everything you need to make the best insurance franchise choice for your car.
You will read about:
What is insurance franchise
What is insurance franchise: It is the insured part in the repair of the car that suffers a partial claim (when there is no total loss), which is covered in the vehicle insurance policy and the damage caused is its responsibility. That is, the insured divides with the insurer the costs of repair.
The payment of the insurance franchise is mandatory and defined in the policy to ensure the contracted protection. The insured has the freedom to choose which car insurance franchise is most interesting for their needs, according to the options available on the insurer.
The higher the franchise, the cheaper is the insurance award, but in cases of total loss, there is no payment of the insurance franchise. And many insurers claim that this measure is used for policyholders to be motivated to drive more safely.
Understand the insured’s participation
The amount for the insured part of the franchise is paid after repair approval and service finishing, so it goes directly to the insurer. The policy also serves to record the value of the franchise, which can be classified as:
Basic franchise: It is the insured’s participation when the damages of the claim are indemnifiable. It is mandatory and charged by event.
25% or 50% (basic) franchise: is the reduced participation of the insured when the damage of a claim is indemnifiable.
75% (basic) franchise: insured’s participation is even lower in cases of partial loss repairs.
Franchise of 125%, 150%, 175% or 200% (basic): In this case, the insured has more participation in indemnifiable claims, but in compensation, receives a higher discount on the prize, which is the amount paid for the hiring of vehicle insurance.
125%, 150%, 175% or 200% of the basic: the insured will bear greater participation in indemnifiable losses, but will have a discount applied to the “hull award”, which is the amount the customer will pay at the time of insurance.
It is noteworthy that some situations, such as third party insurance, are not necessarily part of the insurance franchise, so the insured needs to be aware of the policy and make sure that he is hiring all the coverage he finds necessary.
It may seem obvious, but the safest way is to review all coverage before closing the contract, because if any situation is not covered by vehicle insurance, the responsibility will be the whole insured.
Also read: Car Insurance: Everything you need to know.
See below those who pay the insurance franchise in case of accidents:
How does the insurance franchise work?
The insurance franchise works like this: the insured hires a franchise in the amount of $ 1,000. If he suffers an accident and the damage covered by the insurance policy are valued at $ 4,000, the insured will pay $ 1,000 franchise and the insurer will cover the remaining repair amount, ie $ 3,000 reais.
Unlike health insurance policies, the insurance franchise is only used if the insured trigger. This is because those who pay insurance franchise in case of collision is not always the insured:
The accident of the accident may be the other driver involved, so he will be responsible for paying for the damage. Or even when the costs of car repair are lower than the franchise value.
For example, if the insurance franchise costs $ 1,000 and the repair of the car was valued at $ 500 reais, it is not worth the insured to trigger the franchise. In this case, he can pay half the amount without moving vehicle insurance.
What are the types of auto insurance franchise?
The types of auto insurance franchise are: normal, reduced, major and exempt. Then understand how insurance franchise works one by one and know which one is best for your steering style:
Normal or basic franchise
It has a percentage of 100%, ie, in case of an accident, the insured pays 100% of the amount established in the policy. If the claim exceeds this amount, the insurer pays the difference. Understand in the following example:
If an insured hires an insurance franchise in the amount of $ 3,000 and the vehicle’s repairs in an accident cost $ 5,000, he pays the $ 3,000 and the remaining $ 2,000 will be paid by the insurer.
The disadvantage is that if there is a claim, the insured is responsible for paying a higher amount, until the safety covers the rest of the costs. It is therefore suitable for the most experienced drivers, such as application drivers.
Even so, the normal or basic insurance franchise usually has an average value, especially compared to other types and is the most chosen by the insured.
You might like to read: Application Driver Insurance 99: Learn everything.
Reduced franchise
In the reduced insurance franchise, the insured is responsible for paying only one percentage of what is charged in the normal or basic franchise. Which is usually a value of around 50%, and in cases of claim, it pays less.
However, this reduction ends up being discounted in the final value of the prize. Causing the insured to pay more for auto insurance, which in the long run, it represents a greater expense.
Major or Increased franchise
The major insurance franchise usually has a higher value, making the total value of auto insurance lower. This is why it is the opposite of the reduced franchise. It is usually suitable for drivers with good history in the direction, who do not use the vehicle so much.
Once the insured pays less, this type of franchise is made by drivers who are willing to pay a higher amount in case of a claim. Therefore it is usually chosen by drivers who do not use the vehicle very often.
Exempt franchise
In the exempt franchise model, the insured pays nothing more if the vehicle suffers partial damage. Leaving all the repair cost with the insurer. However, the total amount of insurance becomes much higher.
It is noteworthy that not all insurers offer this type of insurance franchise. And those that offer can greatly limit their use, precisely to avoid spending in the event of a claim. Therefore, this model is not usually very popular.
Do you know how to choose the best insurance franchise for your needs? Keep reading and find out as:
How to know what is the best car insurance franchise?
To find out what is the best car insurance franchise, the interested party should evaluate what best meets your daily needs, in addition to the values that fit your pocket. The lower the franchise, the higher the final value of the prize charged. Understand:
For example, a reduced franchise, where the insured pays 50%, is ideal for those who do not want to pay more if they need to trigger the insurance. Already a normal or basic franchise, 100%, can serve to save when hiring.
In addition to the financial part, you need to be aware of other aspects, such as the use of the vehicle. Because the more used, the more like the chances of having to trigger auto insurance.
Therefore, those who are always driving, as application drivers, can opt for the reduced insurance franchise. Because although it is more expensive at the end, it ensures more security to make your races with peace of mind.
Another point that should be considered is whether the value of the franchise is accessible and fits in your budget. Remembering that smaller franchises may be more attractive, but they represent higher value insurance at the end. Therefore, the ideal is to see what is the best cost benefit.
Learn more about: Vehicle insurance policy: Everything you need to know.
What is the value of the franchise to trigger insurance?
The franchise amount to trigger insurance may vary according to the type of contracted insurance franchise. Vehicle characteristics, driver style and even what options the insurer offers. However, in most cases, rates may be similar.
The amount of the vehicle insurance franchise can range from $ 1,500 to $ 2,000 reais. Therefore, depending on the service that needs to be performed, it is worth checking whether or not to trigger the franchise.
Now you have understood everything about insurance franchise. So find out Advantages of becoming a partner application driver 99 And earn money making races!