Do you want to know car insurance with or without franchise: which one is better? You are on the right spot to know the answer of this question.
When it comes to insuring a vehicle, there are many factors that influence: price, use, age of the car, etc. All these aspects intervene both in the cost of the insurance and in the coverage offered.
For this reason, the differences between insurance with excess or without excess should be well known. Through this article we will clarify your doubts. You just have to keep reading.
Car Insurance with or without Franchise
If you wonder why you should choose between one insurance and another, the decision will depend on your priorities and the needs you want to cover. The first thing will be to define both types of insurance:
Insurance without excess
It is what is commonly known as All Risk. It covers the compulsory Civil Responsibility that every vehicle must have in order to circulate.
See Also: What is CDW insurance in Car Rental
In addition, it includes breakage of windows and windows, fires, thefts, own damages, driver’s accidents, legal defense, claims for damages and travel assistance.
With this policy, the insurance company is responsible for compensation arising from an accident caused by a third party.
Each insurer has its own insurance coverage plans. Before hiring you should check the scope of the policy well.
Excess insurance
The insured is responsible for a set amount for damage caused or received in the event of an accident. Each insurer offers a type of franchise.
This type of policy is recommended for those drivers who have an impeccable accident record or who use the vehicle little. In this way they can save a peak in the insurance fee.
Once both concepts are clarified, let’s see what the difference is. All Risk insurance with excess covers the same coverage as insurance without excess.
The difference is that the higher the amount of repairs you assume, the lower the total price of your policy to pay, and vice versa.
How does a car Insurance Franchise work?
Hiring insurance with a franchise implies having a discount on the policy premium. In exchange, you assume the amount that exceeds the franchise in case of an accident.
For example, if you take out insurance with an excess of $300, in the event of an accident, you will have to assume the expense of $300 in relation to the repairs that are carried out.
Expenses that exceed the franchise will be borne by the insurance company. Before contracting the franchise, you should consult with the insurer where it applies.
See Also: Reason to Rent a Car with Fully Comprehensive Insurance
There are insurers that offer franchises that only apply to own damage coverage, so in case of fire, for example, they do not imply the payment of the franchise by the insured.
What happens with the Car Rental Franchise?
When renting a car, you have to pay attention to several aspects, including the types of insurance offered by rental companies.
When a user rents a vehicle, it already includes basic third-party insurance that covers civil liability against third parties, that is, physical and material damage caused by the driver.
In the event that the rental vehicle is stolen or damaged as a result of an accident, the user is responsible for the vehicle and, therefore, will have to bear the expenses derived from the repair.
To try to alleviate these expenses, the user can choose to take out more complete additional insurance and thus expand that basic coverage.
This is the case of CDW (Collision Damage Waiver) insurance, which is partial coverage for collision, or LDW (Loss Damage Waiver), which offers full coverage.
Except for the All Risk insurance without excess, the rest of the policies include an excess, the amount of which varies depending on the type of risk insured, the vehicle and the company itself.
With this type of clause, the rental company would charge the user the amount corresponding to the franchise in the event of an accident.
But to drive in the safest way, some companies offer the possibility of taking out insurance that would cover that part of the excess.
Insurance Covering Rental Car Excesses
The insurance that covers the excesses of the rental cars offers the user to travel with more peace of mind. In the event of a collision or accident, you will not have to worry about the expenses derived from it.
The excess insurance will be responsible for the amount of the contracted excess in case of accident.
In other words, in the previous example of insurance with a $300 excess, in the event of an accident, the user will not be responsible for that amount, but rather it is covered by the excess insurance.
