Deductibles vs Excess in Thai car insurance
published : 25 Jun 2015 at 17:12
Car insurance is compulsory in Thailand and most people will agree that this is for the best with the busy Thai roads. All drivers in Thailand will therefore inevitably be influenced by insurance policies. Understanding these policies can be difficult especially for non-Thai speakers. To help you understand the policies of your insurance contract, this article will help define some concepts in Thai car insurance. Two very important concepts in insurance are “deductibles” and “excess”. Although these two concepts are quite different, they are confused regularly.
What is the ‘deductible’ in a car insurance policy?
The deductible in an insurance policy is the fixed payment the insured must fulfil after a claim is made. Only after this deductible is paid will the insurance company pay out its agreed coverage. Deductibles are used in the insurance market to keep insurance premiums low for the insured and simultaneously to keep the cost of insuring low for the insurance company. This creates a win-win situation, especially in a world where people rarely seek their insurance for help.
The insured can thus influence their premium via the height of their deductible. A smart driver therefore makes a well-considered choice about their deductible. If you anticipate being involved in frequent minor damage then a low deductible would be advisable, because minor costs will also be covered by your insurance. On the other hand, if you are at high risk of incidental major damage to your car then it is wise to keep your premium low via a high deductible. When you then infrequently do claim damage you will need to pay a higher deductible, but you will have saved a significant amount of money on your lower premium. This should at least even out the cost of the higher deductible if you sensibly insured yourself. To find more information on sensibly insuring your car, visit: www.askhanuman.co.th.
What is the excess in car insurance policy?
Excess is an extra cost you have to pay if you have Type 1 insurance (full coverage), but cannot identify a litigant. For example, when you are hit by another car but cannot identify the car that hit you. Excess payments are around 1,000 baht and you can be charged several depending on the incident.
You can get excess charges when you issue a car insurance claim in the following situations:
- Your car has been scratched by an unidentifiable person or object
- Your car has been damaged by small flying objects, like stones or screws on the road.
- Your car has scraped the road surface.
- Your tires have been punctured by glass or other sharp objects.
- Your mirrors have been knocked off the car by an unidentifiable person.
- You have been injured by flying objects inside your car.
- Your car has been damaged by a natural disaster.
- An animal has damaged your car.