What is an optional deductible in car insurance? Find out here!

Questions about deductibles are absolutely common, and if you are confused about the meaning of optional deductibles in car insurance. Know that you are not the only one. Follow this article and understand the subject better.

When it comes to auto insurance, there are a multitude of situations that can leave doubts in the minds of policyholders.

Among them, those that are most brought to light are those related to franchising.

Many people have difficulty understanding exactly what a franchise is, what its types are and how each of them works.

Thinking about helping with these questions, we created this article. Where you can better understand what the optional deductible in car insurance is and how it works.

Follow along and find out more about this subject.

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Understand better what a franchise is and what its types are

Before talking about the optional franchise, it is worth explaining better what the franchise actually is, and what its main types are.

The deductible is basically the amount that the insured needs to pay for the insurance to cover any repairs.

When insurance is contracted, only part of the risk related to losses is assumed by the insurer, the other part of this risk is borne by the insured.

This means that if the insured is involved in an accident and suffers a loss with partial damages.

When you claim your insurance, you will have to pay part of the repair cost, so that the insurance company can take care of the rest.

This part of the value that is paid by the insured is the deductible. It, in turn, has three main types that can be:

1. Mandatory or normal deductible

The normal deductible, also called basic or mandatory, is the one whose value is equal to that proposed by the insurer.

And, in these cases, it is essential that it is clear that both the value of the deductible and the policy will be maintained in contracts.

2. Reduced deductible

The reduced deductible, or as it is also called, 50% deductible or 25% deductible, is one of the cheapest among the deductibles presented in our article.

However, it is also the option that makes the value of the policy more expensive.

The 50% deductible corresponds to the stipulation of a 50% deductible value, lower than the value offered in the normal or basic deductible.

The 25% deductible consists of a deductible 25% lower than normal.

3. Optional or increased deductible

The increased or doubled deductible corresponds to a value much higher than the price offered in the normal deductible.

This choice makes the insurance policy cheaper, and is highly recommended for people with a history of caution behind the wheel.

What is the optional deductible in car insurance?

As previously mentioned, the deductible is a term that refers to the amount of responsibility of the insured, that is, that must be paid by the insured in cases where the insurance is activated to resolve claims that cause partial loss of the vehicle.

Typically, each insurer has a different price, stipulated as a basic or normal deductible.

And, from this fixed value stipulated as a normal deductible, variations arise for more or less, which are called optional deductible in car insurance and reduced deductible.

The choice of the type of deductible must be made when contracting the service provision and affects the total value of the policy.

In cases where the optional deductible is chosen in car insurance, the customer chooses to count on a higher cost deductible than the normal (or mandatory), defined by the insurance.

When making this choice, he may end up hiring a franchise with a cost that can vary between 150% and 200%, higher than normal.

When the client opts for the optional deductible, they consequently have a much lower policy value than that initially offered.

This happens because, when choosing the increased deductible, or optional deductible, he assumes the majority of the risk of a claim, which leaves the insurer's financial responsibility lower in the event of a partial loss accident.

Although the word optional means optional, when used in the world of insurance, it takes on the meaning of 'bigger option', that is, that the customer chose the most expensive deductible.

This does not mean that the optional franchise can be paid or not, as many think.

The optional excess in car insurance is mandatory in cases of partial loss claims.

When is the payment of the deductible mandatory?

As stated above, there are cases in which payment of the deductible is mandatory and there are cases in which it does not need to be paid, in these situations it is known as an exempt deductible.

Payment of the deductible is mandatory whenever the insurance is activated to carry out a repair, resulting from a partial loss claim.

Be it a collision, a fire, flooding, or others.

The same goes for special covers such as glass, wheels and tires, accessories and more.

These coverages usually have much lower deductibles than those already mentioned here, but which are equally mandatory in the event of the coverage being activated, for isolated situations.

A good example is, you hire a window covering and, during a trip, a stone flies into your windshield and cracks it.

In order for it to be exchanged, you will need to pay a deductible to use this coverage.

The value of these deductibles is usually between 10% and 20% of the total cost of the repair. This will depend on each insurer's rules.

In which situations is the payment of the deductible not mandatory?

In general, payment of the deductible is always mandatory in cases of accidents that result in partial losses, as long as the value of the loss is greater than the value of the claim.

Otherwise, it's not even worth claiming insurance, the best option is to pay for the repairs yourself.

The exempt deductible is only valid in cases characterized as total loss, that is, traffic accidents, or accidents such as falling trees, fire, etc., in which the vehicle suffers damage whose repairs add up to a value equal to or greater than 75% of the cost of purchasing the car.

It is worth mentioning that, for this to happen, the damage must have been caused by a situation covered by the insurance contracted.

Theft or theft accidents in which the vehicle is not recovered within 30 days are also characterized as a total loss and do not require a deductible.

Another situation in which the deductible is also exempt is in the case of activating insurance to cover third parties.

To do this, the insured party must take the blame for the accident.

In this case, simply contact the insurance company and it will take care of all necessary repairs and compensation, without the need to pay the deductible and always within the financial limit contracted by the customer.

Furthermore, when the insurance is activated to resolve problems, through 24-hour assistance, there may also be no excess charge.

We hope that your doubts about what the optional deductible in car insurance is and how it works have been clarified.

If you still have any doubts, please contact us and ask your questions, we will provide you with all the important information on the topic.