Every motorist at least once in his life was faced with the need to buy a policy on a vehicle (TS). But it’s one thing to draw out CTP, that is, to insure damage to property and health of third parties. Such policies are most often purchased for the period of inspection and do not delve into the nuances of the contract. And it’s completely different - to acquire CASCO. The size of the contribution is large, the number of risks is huge, so the insurer also offers to issue a franchise. In short, the essence of this term is as follows: in the event of an accident, the client will still have to spend money on restoring the car. But how many and under what conditions is another question. Read more about what a franchise is under CASCO, what are the features of its formation, read on.
Basic concepts
CASCO - car insurance against theft, theft or damage caused by third parties. That is why banks require it when applying for a car loan. The vehicle itself is insured in the transaction, regardless of who caused the damage.
When writing out the policy, the insurance agent will certainly offer to issue a deductible, telling about all the advantages of the transaction and, of course, about the discount that the client will receive. But the reduction in the initial cost may come out sideways in the future. Franchise - the amount of money that will not be paid to the client in the event of an insured event. It can be expressed in% of the amount of the contract or in monetary units. Its size is fixed in advance in the contract. That is, it is impossible to attribute it to unforeseen expenses. Here's what a simplified franchise with hull insurance is.
Options
A deductible deductible in CASCO insurance means that all payments that exceed its size will be fully compensated by the insurance company (IC). But if the amount of the cost of restoring the car will be small, then the client will have to compensate for the damage themselves. Therefore, this franchise is called "conditional."
Example
The franchise is 5 thousand rubles. If the damage is estimated at 4.5 thousand rubles, then the client will have to pay this money on his own. But if the restoration of the vehicle will require 7 thousand rubles, then the company will cover the losses in full.
The unconditional deductible in CASCO insurance is deducted from the amount of compensation. That is, in any insurance case, the client will have to pay part of the costs out of his pocket. Under the conditions of the previous example, this means that if the damage is 7 thousand rubles, a person will receive only: 7 - 5 = 2 thousand rubles. But if the expert assessment is 4.5 thousand rubles, then the client will have to compensate all the costs on his own.
There are other types of franchises that are provided for a certain category of customers, but these two are most often used. Unconditional is more advantageous, since in the case of a deductible, the amount of expenses can be artificially increased by the insured person.
Benefits
There is no definite answer to the question of whether to purchase a policy with a franchise. Here a lot depends on the specific situation, the driving experience of the driver, his financial capabilities. CASCO insurance with a deductible may be useful if:
- The client wants to save money on the purchase of the policy. If you include any franchise in the contract, the transaction value will significantly decrease. This is especially true for drivers with no driving experience. In such cases, SCs use higher coefficients in the calculations. The larger the deductible, the cheaper the policy. At the same time, the client needs to be prepared for the fact that he will receive a refund from the company only with significant damage to the car. He will have to fix minor scratches at his own expense.
- Man wants to save time. When an insured event occurs, the company must provide a whole package of documents: from a photocopy of the passport to certificates from the traffic police. Well, if these documents were issued immediately at the scene. But often clients have to go for documents for examination. If the amount of damage is small, then it makes sense to compensate for it yourself. So you can buy time and money.
- IC is also beneficial to issue a CASCO with a franchise. The reviews of company employees confirm this. Regardless of the amount of damage, the bureaucratic procedure for processing compensation is always the same. But the costs can significantly exceed the amount of compensation. Therefore, agents try to sell franchised policies.
Who should buy a policy?
Having figured out what a franchise under CASCO is, we turn to the question of who should conclude such an agreement. So, a potential buyer must meet several parameters:
- Availability of free cash. The client will have to compensate minor damages on their own. But the insured event may not occur. Then the savings on the purchase of the policy will be justified.
- Long experience of trouble-free driving. If a person controls the vehicle efficiently and feels like a fish in water behind the wheel, then the CASCO franchise will help to save the budget and at the same time maintain a sense of security, as the car will be protected from theft or complete destruction.
- The desire to issue a policy for only one type of risk. Full CASCO includes protection against damage and theft. But if a person is confident in his driving skills and will not pay attention to minor scratches, then you should buy a policy with a large deductible (from 7%) for the risk of “Damage”. "Theft" is rarely offered to customers separately. Most often, it comes bundled with other services. But if the client has been served in the company for a long period, then a large deductible at CASCO can become a profitable acquisition.
Exceptions to the Rules
According to statistics, inexperienced drivers more often get into accidents and turn to the company for compensation. For them, saving on the policy results in significant costs for the restoration of the car. It is better to immediately buy insurance with higher rates. The same applies to drivers who have received a license after 40 years.
Recommendations
So who benefits from an unconditional CASCO franchise? Experienced drivers who do not get hung up on small scratches and are ready to compensate for them at their own expense. Such customers should buy a policy with a franchise in the range of 0.5-2% of the cost of a car.
Drivers with long experience in accident-free driving can conclude an agreement, according to which only the large costs of restoring the vehicle will be compensated. Usually a deductible of 7% is provided for them.
It is better for beginners to forget about such a concept as a “CASCO franchise”, which means buying a policy with increased coefficients at once. Although it will not work to save money, the psychological factor will still work: the driver will operate the vehicle more carefully.
Nuance
You can still receive a full refund even if the client has issued a CASCO with a franchise. Feedback from drivers on the forums confirms this. But this trick will succeed only if the culprit of the accident is not you. In Russia, there are two types of policies - CTP and CASCO. The first compensates for the damage caused to third parties, and the second - the vehicle of the insured. So you can get part of the compensation within the franchise under the compulsory motor third-party liability insurance policy. But in this case, you will have to collect the full package of documents, which is necessary for registration of the insured event. If part of the costs is compensated by CASCO, and the documents have already been transferred to the “native” insurance company, then the traffic police can request copies of certificates. The most important thing is to formalize the procedure before the claims are made by the IC, which issued CASCO, to the insurer of the culprit. Otherwise, the compensation will be reduced by the amount of wear of the parts.
Car loan
By providing borrowed funds for the purchase of a vehicle, the bank may require additional guarantees from the client. In this case, it will be CASCO. When buying new cars, the design of this service is a prerequisite for the transaction. Banks rarely enter into contracts without insurance. Most often this happens during promotions.
When buying a car with mileage, CASCO can not be issued. Some banks agree to such a scheme, but at the same time greatly increase their rates. A lending institution is interested in a refund under any circumstances. But if the car was stolen, but there is no insurance, then the client will have to compensate for the costs, however, as well as restore the car after an accident.
Solution
Drivers are advised in this case to insure the car for a year (if the bank allows it) and experimentally determine if you need a policy at all. If this is not possible, then you should proceed according to the standard program. Experienced drivers can purchase a CASCO with a franchise with a car loan, which will insure only theft or complete destruction. The rest should buy a policy with a small discount amount.
You can reduce the cost of the policy in other ways:
- Reduce the payment period from 5 to 2 years.
- By insuring a car only for the amount of the loan body, without taking into account the advance payment. Then the refund of the franchise for CASCO will be paid in the same proportion:
(Payment - deductible) * (Initial cost of the car - advance payment) / 100.
Compensation
Most of the negative reviews addressed to companies are related to a lack of understanding by customers of the essence of all procedures and concepts, in particular, what is a franchise under CASCO. But if you carefully read the contract and understand the details of the transaction before signing the papers, then problems can be avoided. Consider this using the payout procedure as an example.
Compensation can be reduced due to such deductions: deductible, depreciation. All of them are formed according to the terms of the contract. By signing the paper, the client gives his consent and confirms that he is familiar with the details of the transaction.
Example
The man insured the vehicle in the amount of 500 thousand rubles. The contract contains a deductible deductible of 1.5% in the event of an accident. Amount of loss: 50 thousand rubles. The first thing the payment amount will be adjusted for is the deductible:
50,000 * (1-0.015) = 49,250 rubles.
This is followed by wear and tear on the car. The amount of vehicle depreciation is deducted from the cost of spare parts that cannot be restored. The longer the car is used, the greater the percentage of these costs.
Coordination of the cost of repairs with the service station - this item is clearly regulated by the contract. If it states that the Service Provider selects the service station, the amount of compensation will be agreed upon by the company representative and the service station. But in this case, the client cannot be sure of the quality of the services provided to him. Therefore, at the stage of signing the documents, it is worth making sure that the phrase “STO under warranty” is included in the contract.
Conclusion
A deductible is the amount of expenses that upon the occurrence of an insured event will not be compensated by SK. The presence of this element in the contract reduces the initial cost of the policy. But for inexperienced drivers, this savings can then turn sideways. People who feel insecure while driving are more likely than others to get into accidents. Experts advise such customers to immediately purchase a policy with higher rates and terrorize the insurance for every scratch. A franchise can save money only for experienced drivers.