Thursday, August 6, 2009

How To Define An Insurance Deductible



All insurance policies should be understood properly by the payer. Sometimes this can be challenging because of the amount of information contained. Any thing that is not understood, should be explained by the insurance agent, before a payment is made.

The policy can be manipulated to fit a budget. The excess or deductible is the amount subtracted from the sum received for repairs as a result of a wreck. Sometimes this is presented as a percentage of the vehicle value, and other times it is a fixed amount.

Excess is a term used on policies instead of the word deductible. Either way, this is defined as the expense that will have to be compensated by the owner and operator of the crashed vehicle. When a percentage is used to find the amount of a deductible. The total amount the will be needed to fix the vehicle is assessed. Then the percentage will be subtracted from that. The insured pays the percentage and the insurance company pays the rest.

It is urgent to make sure the insured will benefit financially from an accident. Use common sense when deciding if reporting an accident to your insurance company, is a wise decision. It may be a better financial decision to repair the vehicle on your own, or continue to operate it with a dent or two. Filling out a claim, will commonly increase the price of an insurance policy.

By properly assessing the situation, and deciding not to report a crash, you can cash in on another benefit. This option is described by looking under the no claim bonus section of the policy. When logically not filing an accident claim, you can get compensated otherwise.

When reviewing a policy there will be several types of deductibles. There is one that is a base across the board for every insured consumer that chooses the company. The others are used as a method to raise the amount the insured is responsible for, in order to decrease the monthly amount paid.

Chances are likely of an excess or deductible having a significant rise, when a rookie driver is applying for insurance. Whether an addition to an existing policy, or a new individual policy, either way the risk factor is increased and the deductible will be raised.

To sum it all up, there is an amount of deductible defined in a policy. The insurance company usually will give the holder the freedom to adjust this amount, if it seems logical.

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