The insurance deductible corresponds to the amount of the loss not compensated by your contract. It only applies to claims for which you are liable . In other cases, it will apply to the responsible third party.
The terms of application and the amount thereof must be set by contract and help determine the tariff. The higher the amount, the less expensive the contract. On the other hand, a deduction of a deductible (lowering or cancellation of the amount) will significantly increase the rate.
Its amount can be left to the free choice of the subscriber. This is particularly the case for auto insurance contracts.
Finally, it is not opposable to third parties. It only concerns the insured.
The different formulas
They vary depending on the type of contract (home, car or personal insurance) and the company.
It is the one that is most applied by the companies. It acts as soon as the set minimum compensation amount is reached.
The amount paid by the insurer is the amount of the loss minus the amount of the absolute deductible.
The latter can be expressed on the basis of a fixed or proportional amount. In the latter case, the contract usually specifies a percentage remaining payable by the insured (for example 20% of the amount of the claim) with a ceiling expressed in euros.
Called also a simple franchise, it functions as a level to be reached in order to trigger the full refund of the loss suffered according to the indemnification conditions stipulated in the contract. Let’s say it’s 500 euros. There are two scenarios when you report a claim:
The compensation amount is 350 euros. You are not compensated. The compensation amount is 1000 euros, you are fully reimbursed.
On the other hand, it avoids the multiplication of the number of interventions for small claims that would have the effect of increasing the cost of the contract.
Some contracts mention a grace period which corresponds to a period during which the subscriber does not receive any compensation.
This is the case for credit insurance contracts, which normally provide for the payment of temporary incapacity benefits only after 90 days.
Some companies offer the option of a total (no-deductible) or partial buyback in order to limit the effects. These options obviously have a cost that needs to be measured before deciding.
The waiting period
It should not be confused with the insurance deductible the waiting period corresponding to a waiting period so that the subscribed fully opens its contract rights. This is the case for most mutual health insurance contracts which, for expensive care such as dental or optical care, differ from the guarantee. These contracts need to wait sometimes several months after the effective date to be covered.