Answer:
The deductible is one of the most misunderstood concepts. To clarify, here’s a simple explanation that will guide you through its basics and implications.
What is a deductible?
A deductible is the amount you personally pay when you file your claim. Your insurance company takes care of the rest.
Example:
For example, if you have an accident resulting in €1,500 in repairs and your policy includes a €300 deductible:
- You pay: €300
- Insurance pays: €1,200
Now, why do deductibles exist?
Deductibles discourage you from filing claims for minor damage. Without them, you and others would file more small claims, raising premiums for everyone.
Types of deductibles:
- A general deductible applies to any claim, such as at-fault damage, theft, or fire. If your car is new or high-value, you might consider this option.
- Per-claim deductible: You pay the deductible for each incident. This is the most common type.
- With an annual deductible, you only pay once per year, no matter how many claims you file. If you expect several minor incidents, this might suit you.
- If you choose a percentage deductible, you pay part of the repair cost – for example, 5% or 10%. This is common in lower-cost policies. Remember, for major repairs, your out-of-pocket costs can be high.
Is it worth paying a higher premium to increase monthly payments? Premium (you pay more each month)
- You pay €0 per claim.
- Ideal if you want total peace of mind
With deductible (e.g., €300):
- Lower premium (save 15-30% annually)
- You pay €300 per claim.
- Ideal if you want to save money and accept paying for small bumps
Our recommendation:
- If you have a new car or it’s worth over €20,000, choose a low deductible (€150-300) or none at all. You won’t want to pay €500 for a small bump.
- If your car is 5-10 years old (worth €6,000-15,000), a deductible of €300-400 is a good call. The premium savings make it worthwhile for you.
- If your car is older (worth less than €4,000), don’t buy comprehensive. Third-party is a better fit for you.
The math you should do:
Figure out how much you save per year with the deductible. Divide your savings by the deductible amount to see how many claims you can make before it’s not worth it for you.
Example: You save €200 per year with a €400 deductible. 200 ÷ 400 = 0.5. If you have one claim every two years, you come out ahead.
