What is an increased deductible? | Auto Insurance

Find out what an increased deductible is and whether it can be advantageous when protecting your car with insurance.

Car insurance has several rules and how it works needs to be understood by vehicle owners so that there are no surprises when it needs to be activated.

Not everyone knows what an increased deductible is, or rather, many policyholders do not fully understand what a deductible is or that there is more than one.

In this text, we will provide information about the increased deductible so that you can know if this is the best option for you.

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What is franchising?

The deductible is a way that insurance companies have found to make insurance cheaper, by not having to pass on all the costs without a claim occurring.

In order to be eligible for insurance coverage, a premium must be paid in a single payment or in installments. There is a deductible to prevent the insurance from being activated unnecessarily.

It works as a contribution from the insured when an accident occurs and the vehicle needs repair. The amount is fixed and must be established in the contract.

How does the franchise fee work?

The increased excess will only be charged if the insurance is activated in cases of partial loss, which means that the car has suffered damage and will need repairs to be able to drive again.

When you contact the insurance company to report the claim, you can choose a workshop or follow the instructions you received.

The vehicle repair will be paid by the insurance company directly to the workshop, however, the owner must pay the deductible to the establishment that is carrying out the repair.

Let's assume that the damage to be repaired costs R$6,000 and the deductible amount established in the contract is R$1,000. The insurer will be responsible for paying R$5,000 and the insurer for the deductible, thus the costs are divided.

It is worth noting that the deductible is only charged when there is a partial loss. In the case of a total loss that includes theft, robbery or collision with a repair value of over 75% of the vehicle, the insurer pays the full compensation without the need for any participation from the beneficiary.

What is the increased deductible?

If you are still wondering what an increased franchise is, know that it works in the same way as we explained above, however, what makes it different from the common franchise is its value.

When taking out car insurance, you can choose between three types of excess: basic or normal excess, increased and reduced.

The basic deductible is the most common and one of the first options offered when getting an insurance quote.

An increased deductible is an option that allows a person to pay a lower premium. This means that if they choose to pay in installments, the monthly amount will be lower than if they had opted for a normal or reduced deductible.

As with the increase, the amount paid in the event of a claim is higher and the intention of the deductible is to share the costs with the insured and find a way to make the insurance cheaper, the most significant expense may be incurred when a claim occurs.

In the case of an increased deductible, the insurer's co-participation can reach twice the value of a normal deductible.

Information about the deductible, as well as its value, must be specified in the contract so that the insurer knows exactly what you are taking part in.

Who is the increased deductible suitable for?

Knowing what an increased deductible is, it may seem like a great advantage, after all, the person will pay much less for insurance. If you only analyze this point, it is, but there are other factors involved.

This type of deductible is not recommended for everyone, because when an accident occurs and the insurance is activated, the amount to be paid all at once can be quite high, and this amount often cannot be paid in installments. If the person does not have the full amount, the vehicle repair may not be carried out.

At this point, the question arises as to who should use the increased deductible.

It is recommended for those who have a good driving record and have a low risk of being involved in an accident.

If the driver has never been in a traffic accident and rarely uses the car, for example, to do activities in the neighborhood such as shopping, then the risk is low. In this case, the driver may have what we call a “garage car”, one that spends more time parked than on the street.

However, you need to take your financial situation into account. You need to have money set aside to pay the increased deductible in the event of a claim. If you fall into any of these situations, this may be the best option.

Knowing what an increased deductible is and who it is recommended for, when you get a quote for car insurance, don't forget to research it.