How much does the policy guarantee? The coverage limits: ceiling, deductible, and overdraft
Identifying your needs is not enough … Once you have decided to insure, here is another important question to ask: if the risk occurs, would the coverage be total or partial? Some important clarifications on ceilings, deductibles, and overdrafts
When you sign an insurance contract, you are in principle also protected from the economic burden of remedying damage suffered or caused. But how far does the coverage go?
A question that is always good to ask yourself from the moment of signing the contract because it is not at all obvious that the policy guarantees total coverage in the event that the risk occurs.
From a legal point of view, the insurer in fact undertakes, against the payment of the premium, to claim back the insured, but only within the terms actually agreed which, in many cases, do not coincide with the full coverage of the related expenses. the risk covered by the policy.
Therefore, when signing the insurance contract, it becomes essential to pay attention to 3 fundamental elements: ceiling, deductible, and an overdraft.
The term ceiling (also “risk ceiling” or “reimbursement ceiling”) indicates the maximum sum that the insurer makes to pay by contract to each insured risk.
This limit is set per risk and per year (or at a lower frequency in the case of insurance contracts shorter than one year, such as quarterly or half-yearly) and represents the maximum coverage that the insurance company undertakes by contract to guarantee.
This implies that, if the damage requires an expense exceeding the ceiling, the difference between the ceiling and the actual expense will not be borne by the insurance company, but by the insured. Alternatively, the contract may instead provide that the company initially covers the expenses, but provides for a subsequent reinstatement of the sum by the contractor.
In any case, there are minimum legal thresholds for which the ceilings are set: for example, the minimum ceiling for Motor TPL is 774,685.35 euros (non-“round” figure resulting from the conversion into euro of the old 1.5 million lire ). In the same way, it should in any case be specified that, in the event of any increase in the premium, it is still possible to guarantee a higher ceiling; some insurance companies (but not all) even contemplate the option of an unlimited limit.
The term deductible indicates the exclusion from the compensation of minor risks or part of the coverage of major ones, ie the share of damage that the insured agrees to “bear” on his own.
An example: take the case of a computer that is worth 1,000 euros and is insured for its full value, but for which there is a deductible of 100 euros. In the event of an absolute deductible, upon the destruction of the computer, the insured would be entitled to receive 900 euros; if it were relative he would instead be entitled to 1000 euros.
This is because when the deductible is absolute, the indemnifiable damage must necessarily be reduced by the economic amount of the deductible itself (indemnifiable damage: 1000 euros; deductible: 100 euros; 1000 – 100 = 900 euros). When, on the contrary, the deductible is relative, if the indemnifiable damage is lower than the deductible itself (eg 99 euros) nothing will be due; if,
on the other hand, the damage is greater than the amount of the deductible, the “reimbursement” will be fully guaranteed within the limits established by the ceiling. In essence, therefore, the relative deductible operates only in the event that the damage suffered is lower than the amount of the deductible itself agreed in the policy.
Therefore, in summary, through the deductible, the insurance company “frees itself” from the payment of specific amounts of the damage. The indemnity received by the insured will consist of the result of the subtraction of the deductible from the amount of the expense to cover the damage.
In the specific case of Motor TPL insurance, the deductible can then represent an amount of coverage that the insured must return in full to the insurer if he has caused the damage. A final clarification is then necessary in the case of the so-called ancillary guarantees(i.e. the optional options such as the Lasko or theft-fire policy,
which are often added to the Motor TPL insurance, which is instead mandatory), for which it is particularly advisable to pay close attention to the amount of the deductible, its type, and other possible conditions: often, in fact, in these cases, the insurance company does not pay the indemnity if the expense for the damage is lower than the deductible and pays only the difference between the expense and the deductible if the damage is higher.
In both these circumstances, it is consequently possible that it is more convenient for the insured party to compensate for damage rather than make use of the stipulated policy: requesting compensation to avoid paying a small amount could in fact cause a jump in the merit class and a consequent premium increase.
Finally, the term uncovered indicates that part of the damage which, by contract, remains in all conditions to be borne by the insured. Although a fixed minimum can be foreseen, it is generally expressed as a percentage. It, therefore, differs from the deductible in that the amount of damage that remains in the hands of the insured, and therefore is not subject to compensation by the company, is normally parameterized to the value of the indemnifiable damage, usually with the aim of committing the insured to avoid behaviors that can cause harm.
Also in this case we try to clarify with a concrete example. If the indemnifiable damage were again equal to 1,000 euros and the policy provided for an overdraft equal to 20%, the liquidate amount would be equal to 800 euros (damage: 1,000 euros; uncovered: 20%; value of the overdraft applied to the damaged item indemnifiable = 20% of 1,000 = 200; indemnity equal to 1,000-200 = 800).
And, thus, if the damage were equal to 10,000 euros, the compensation – in application of the overdraft – would be equal to 8,000 euros (damage: 10,000 euros; overdraft: 20%; value of the overdraft on the damage item equal to 20% of one thousand = 2,000; compensation equal to 10,000-2,000 = 8,000). This is precisely due to the fact that, unlike the deductible, the overdraft is not a fixed and predetermined value, but must always be parameterized on the basis of the theoretical indemnifiable value.
Attention! Although they function in an apparently similar way, deductibles and overdrafts are not the same and can even coexist within the same insurance contract. Hence, the importance of always carefully reading all the documentation presented at the time of signing the policy:
knowing the offer well is the best way to understand to what extent you are protected and therefore to choose the insurance solution that best suits your needs
