How To Define An Insurance Deductible

June 6, 2017 · Posted in General Articles on Car Insurance 

All insurance policies should be understood properly by the payer. Sometimes this can be challenging because of the amount of information contained. Any thing that is not understood, should be explained by the insurance agent, before a payment is made.

The policy can be manipulated to fit a budget. The excess or deductible is the amount subtracted from the sum received for repairs as a result of a wreck. Sometimes this is presented as a percentage of the vehicle value, and other times it is a fixed amount.

Excess is a term used on policies instead of the word deductible. Either way, this is defined as the expense that will have to be compensated by the owner and operator of the crashed vehicle. When a percentage is used to find the amount of a deductible. The total amount the will be needed to fix the vehicle is assessed. Then the percentage will be subtracted from that. The insured pays the percentage and the insurance company pays the rest.

It is urgent to make sure the insured will benefit financially from an accident. Use common sense when deciding if reporting an accident to your insurance company, is a wise decision. It may be a better financial decision to repair the vehicle on your own, or continue to operate it with a dent or two. Filling out a claim, will commonly increase the price of an insurance policy.

Instead of filing a claim expecting the insurance company to pay for damages, you can utilize the route of receiving a benefit for not filing a claim. You cannot file a claim and use this benefit at the same time, these two options cancel each other. There may be an incentive via a credit to your premium, or a slightly lowered premium. Also you could be entitled to a payment from the insurance company.

When reviewing a policy there will be several types of deductibles. There is one that is a base across the board for every insured consumer that chooses the company. The others are used as a method to raise the amount the insured is responsible for, in order to decrease the monthly amount paid.

If you have maintained a policy already and the time has come to add a legally operating child that has come to age of driving, this will cause a deductible inflation. The fact is, a new driver is automatically considered a dangerous risk. Insurance companies do not allow a new driver to prove driving ability before raising the deductible or premium amount.

In conclusion, there is always a set amount that will have to be paid by the insured. This amount can be fluctuated, depending on the variables of the individual policy. Sometimes changing this fixed charge can save money, and sometimes it is not feasible. The choice is yours.

Graham McKenzie is the content Syndication Manager at Insurance123.co.za South Africans leading car insurance information portal

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