The world of Insurance is quite complex, so it is completely normal to feel a little lost the first time you look for information about Insurance. Although almost all of us know what a third party or full risk insurance is, not many know what an insurance with excess is. It is important to know this type of insurance well when hiring our car insurance, since it can be very useful or not interest us at all.
In any case, when hiring a Car insurance, the best option is to have the advice of experts. Euroteide Seguros is an Insurance consultancy located in the south of Tenerife that, with more than 24 years of experience in the Insurance sector, will know how to advise you on the policy that best suits you. They not only work with car insurance, but also with other products such as Home insurance, the Death insurance or the Health insurance, among many others.
In this article we tell you what a Insurance with excess so that, in addition to having the appropriate advice, you know what type of insurance is the one that best suits your needs.
What is insurance with excess
Un Insurance with excess It is a method of insuring a vehicle - since the franchise applies to car insurance - in which there is a commitment between the insured and the insurance company by virtue of which the insurance company charges less for the insurance in exchange for the fact that, in the event of a claim or fault at fault, the insured person pays a certain amount.
Is a cheapest way to insure the vehicle, since the insurance premium will be lower. However, the amount that the insured must pay in the event of an accident at fault is not usually very high and usually compensates.
Thus, the franchise is part of the damage that has occurred in an accident and for which the insured must bear. The amount of the franchise is usually fixed, but it may also consist of a percentage of the total amount insured, depending on the policy in question. In addition, it must be taken into account that, the higher the excess, the greater the discount on the initial insurance premium, so the insured will have to pay less.
How insurance with excess works
In franchise insurance, as we have already advanced, the insured must pay a part of the expenses derived from the accident he has suffered. However, it is important to note that, If the amount of the damages produced in the claim is less than the excess amount, these must be paid by the insured. In any case, what the insured has to pay will depend on the insurance excess. Let's illustrate this question with an example:
Let's imagine that the insured has a car insurance with a deductible excess of 300 euros. Your car suffers an accident that causes damages worth 250 euros. In this case, the insurance company will not compensate the insured, since any damage of less than 300 euros must be assumed by the insured. However, if the claim caused damages worth 1.000 euros, the insurance company must compensate the insured with 700 euros (the amount of the damages - the Insurance franchise) and the insured must assume the amount of his franchise, that is, 300 euros.
The excess, however, can also consist of a percentage of the total amount insured. Thus, let's imagine that the insured has a 5% franchise and an insured capital of 100.000. You have suffered a loss that has caused damages worth 1000 euros. By having a 5% franchise of 100.000 euros, the franchise is 5.000 euros, so the insured, in this case, must pay the expenses incurred in the claim and will not receive compensation from the insurer.
For what type of people is a franchise insurance suitable?
All drivers want to pay less for their car insurance, so, in principle, insurance with excess is recommended for everyone. However, we must bear in mind that each time an accident occurs, the insured driver who has taken out Insurance with a franchise has to pay an amount, while, if he has taken out Insurance without a franchise, this amount would be covered by the Insurance company . So, Insurance with franchise is made for the following types of drivers:
- Prudent and responsible drivers who do not usually have accidents and claims regularly. Thanks to the franchise, you can save a good amount of money on your insurance premium.
- Drivers who don't use the car often. By using the vehicle less, the probability of having an accident is greatly reduced, so we can save a good amount of money by taking out an insurance policy with a franchise.
Undoubtedly, Insurance with excess is a great option for many drivers, since, while the average cost of Insurance without excess amounts to 1.037 euros, the cost of Insurance with excess is 454 euros. It represents a great saving of money, especially if we take into account that many studies suggest that around 70% of drivers who take out their insurance policy without excess do not amortize it throughout their trajectory.
Although no one is better than ourselves to know what type of Insurance suits us, the truth is that sometimes it is convenient to get the help of a good Insurance consultancy, such is the case of Euroteide Seguros. Euroteide Seguros is an insurance consultancy that, with more than 24 years of experience, will know how to guide you so that you can hire the car insurance that best suits you and your needs.