One of the terms drivers frequently encounter when purchasing CASCO insurance is the deductible, sometimes referred to as a franchise. Many people sign a policy without fully understanding what it means. However, the deductible directly affects both the insurance premium and the amount paid in the event of a claim.
Understanding deductibles is important when comparing CASCO policies and choosing the right coverage. Two insurance offers may appear similar in price, while their deductible conditions can be completely different.
A deductible means that part of the loss is paid by the vehicle owner when an insured event occurs. The insurance company only covers the amount above the deductible.
For example, if the policy includes a deductible of 300 AZN and the damage is 1,000 AZN, the vehicle owner pays the first 300 AZN while the insurer may cover the remaining 700 AZN according to policy terms.
Deductibles are used to share risk between the insurance company and the policyholder. Their purpose is to reduce the number of small claims and encourage more careful driving behavior.
In addition, policies with deductibles usually have lower premiums. Since the policyholder accepts part of the risk, the annual insurance cost may become more affordable.
Generally, the higher the deductible, the lower the CASCO premium. This is because the insurance company's potential financial exposure is reduced.
Conversely, policies with no deductible or a very low deductible often have higher premiums because the insurer assumes a larger portion of the risk.
A deductible may be defined as a fixed amount or as a percentage. A fixed deductible specifies an exact amount, such as 200 AZN or 500 AZN.
A percentage deductible means that the vehicle owner pays a certain percentage of the loss. For example, with a 10% deductible, the policyholder covers 10% of the damage while the insurer covers the remaining amount according to the policy.
This depends on the policy conditions. Some CASCO packages apply the deductible to all claims, while others only apply it to certain risks.
For example, a deductible may apply to collision claims but not to theft or natural disaster claims. The exact rules should always be checked in the contract.
This depends on the driver's budget and risk tolerance. If a driver wants to reduce the annual premium and is willing to cover small losses personally, a deductible policy may be a good choice.
On the other hand, drivers seeking maximum protection and minimal out-of-pocket expenses may prefer policies with low or zero deductibles.
You should carefully review the deductible amount, when it applies, and whether it is calculated separately for each claim.
It is also important not to focus solely on the premium. A cheaper policy may seem attractive but could result in higher personal expenses during a claim due to a large deductible.
The deductible is one of the most important parts of a CASCO insurance contract. It affects both the insurance premium and the compensation paid after an insured event.
When choosing CASCO insurance, pay attention not only to the price but also to the deductible conditions. 👉 Apply for CASCO insurance.
