Deductible (insurance)

If the loss of an insured event , in the presence of a conditional deductible , did not exceed its amount specified in the contract, the insurer does not pay the insurance indemnity for such a loss. In the event that the loss exceeds the size of the deductible, then such a loss is fully reimbursed.

For example, if the insured amount is 100 rubles. a conditional deductible of 15 rubles has been established, then in case the amount of loss is 10 rubles, such a loss is not reimbursable (since the amount of the loss is less than the conditional deductible).

However, if under the same initial conditions the size of the loss will be 20 rubles. and more, the entire amount will be refundable by the insurer.

Unconditional deductible is a part of the loss that is not subject to compensation by the insurer and is deductible when calculating the insurance indemnity payable to the policyholder from the total amount of compensation.

For example, with an insurance amount of 100 rubles. installed unconditional franchise 15 rubles. If the amount of the loss is 10 rubles, then such a loss is not refundable (since the amount of the loss is less than the unconditional deductible).

However, if, under the same initial conditions, the amount of loss will be 20 rubles, the insurer will be subject to compensation of the amount of 5 rubles. (that is, 20 rubles. - 15 rubles. = 5 rubles.).

If the amount of the unconditional franchise is determined as the proportional share of the loss, then the established amount of the unconditional franchise is in any case deducted from the amount of the insurance indemnity.

For example, with an insurance amount of 100 rubles. an unconditional deductible of 15% of the insured loss was established. In this case, if the amount of the loss is 20 rubles, then the amount of insurance compensation will be 17 rubles (that is, 20 rubles × (100% - 15%) = 17 rubles).

In the case of a temporary deductible, the insurance indemnity is not paid if the validity period of the stipulated circumstance, which could lead to the insured event , was less than the established one. A temporary deductible is denoted in terms of time. If the contract does not specify the type of temporary deductible (conditional or unconditional), then it is considered conditional, that is, losses incurred as a result of a specified circumstance longer than the specified period are reimbursed as if the temporary deductible was not available. It is applied, as a rule, in insurance agreements on business interruption, in which the amount of loss directly depends on the period of downtime.

Among other things, insurance contracts, especially large property insurance contracts , may contain a condition of a high deductible , keeping in mind its size: usually the level of such a franchise starts at $ 100,000. The essence of a high deductible is that first the insurer compensates for the loss in full and immediately, and after the restoration of the property it receives compensation from the policyholder in the amount of the franchise. The additional benefits of using a high franchise can also include the obligation to protect the interests of the insured in court, which is absent if you use your own retention at a comparable level.

The type of franchise in which the amount of damage that is not subject to compensation by the insurer is changed. The structure of a dynamic franchise is different in different companies. For example: the first insurance case is fully reimbursed; 2nd fully; 3rd - the amount of payment is reduced by 10%; 4th - the amount of the payment is reduced by 15% ^[1] .

In Russian civil law for more than 20 years, the notion of franchise defined by law was absent.

On January 21, 2014, amendments to the Law of the Russian Federation dated November 27, 1992 No. 4015-I, clause 9 of Article 10 as amended by Federal Law dated July 23, 2013 No. 234 came into force for the first time introducing the concept of franchise:

A deductible is a part of losses that is determined by federal law and (or) an insurance contract , is not refundable by an insurer to an insurer or other person whose interest is insured in accordance with the terms of the insurance contract, and is set as a certain percentage of the sum insured or at a fixed amount. In accordance with the terms of the insurance, a franchise may be conditional (the insurer is exempted from damages if its size does not exceed the size of the deductible, but reimburses it fully if the amount of loss exceeds the size of the deductible) and unconditional (the amount of insurance payment is defined as the difference between the amount of loss and franchise size). The insurance contract may provide for other types of deductibles.

- Law of the Russian Federation of November 27, 1992 No. 4015-I “On the organization of insurance business in the Russian Federation”

This definition introduces legal certainty in the application of the concept of a franchise in insurance.

Previously, the possibility of using the franchise in practice was confirmed by the courts, in particular, paragraph 20 of the Resolution of the Plenum of the Supreme Court of the Russian Federation No. 20 of June 27, 2013:

The terms of a voluntary property insurance contract may provide for provisions excluding the payment of insurance compensation if the amount of losses incurred as a result of an insured event for the insured ( beneficiary ) does not exceed or less than the amount of damages (franchise) specified in the insurance contract. The deductible can be established in the form of a certain percentage of the sum insured or in a fixed amount.

In determining the terms of the contract of voluntary insurance of property on a franchise, the parties must act in good faith and prevent abuse of the right.

- Resolution of the Plenum of the Supreme Court of the Russian Federation dated June 27, 2013 No. 20 “On the application by the courts of legislation on voluntary insurance of property of citizens”

• Franchise - recommendations for policyholders, compensation calculation schedules, comparison of types of franchises
• Yuldashev R. T. Glossary of terms. Franchise // Introduction to insurance sales, or how to learn to sell hope . - Moscow: Ankil, 1999. - p. 129. - 134 p. - ISBN 5-86476-128-1 .
• Franchise - media publications