Home insurance deductible: how do you know if your amount is appropriate?

Determining the deductible for home insurance can be a tricky subject that should be addressed as soon as you sign your contract to avoid any disappointment. This threshold depends on your compensation amount and therefore on reimbursement in the event of damage covered by your insurance. For your calculations!

Insurance deductible: a key component that should not be underestimated

In connection with a multi-risk housing contract (MRH),

the deductible corresponds to what ultimately remains the insured’s responsibility in the event of damage

. It is important to know the main features and nuances.

Two types of deduction are possible: relative (otherwise called simple or reached) and absolute.

–

Relative deductible

: it consists in reimbursing the insured the excess amount as soon as the damage expense exceeds the excess amount.

Example: deductible of €200. The claim amounted to €600. The insured receives from his company: €600.

The actual amount remaining on his account: €0. The franchise will then disappear.

–

Absolute deductible

(the most widespread): it makes it possible to reimburse the difference between the cost of the claim and the deductible to the insured, as soon as the first exceeds the second.

Example: deductible of €200. The claim amounted to €600. The insured receives from his company: €400.

The actual amount remaining on his account: €200.

To note :

in the absence of precision in the contract, the absolute excess will apply. In addition, in both cases of excess, if the size of the loss is lower than the excess, the insurance pays no compensation.

The concept of deductible appears in the original contract (part special conditions) and can be determined in several ways depending on the insurance company

:

– Fixed amount

– Percentage of the amount of damage caused by the claim (indicating a minimum and/or a ceiling)

– An amount that is indexed to a benchmark index.

Browse our special file to understand everything about home insurance.

Insurance deductible and insurance premium: find the right balance

The logic between deductible and insurance premium is quite mechanical: the higher the deductible, the lower the insurance contribution and vice versa. This helps to adjust its insurance costs in relation to the valuation of the risk. The right questions to ask yourself: What is the value of my property that needs to be protected? What is the risk of a disaster in my home? What is the maximum amount I can set aside for my insurance in my monthly budget?

Good to know :

in the event of a reduced or even non-existent deductible, the monthly payments requested by the insurance company will be increased accordingly to handle any future costly claims.

How about determining the ideal amount for your home insurance deductible?

With certain insurance policies, you have the option of varying the size of your excess according to certain dimensions, such as: intended level of protection (simple coverage for rental risks, enhanced coverage with access to third parties/neighbors, coverage of personal belongings and/or furniture, etc., maximum monthly insurance contribution, valuables, etc. The personalization of your home insurance agreement will thus provide some control over the size of the associated deductible.

Cases of specific requirements:


In HRM insurances, large external damages are defined to provide adequate compensation.

– The excess amounts are regulated and determined by the state (€380 for a

natural disaster

and €1,520 for a landslide following drought and/or soil rehydration) (1).

– In the case of

technological disaster

(calibrated according to the model of the AZF accident and defined as such, if at least 500 homes are rendered uninhabitable (2), no excess will be applied.

As the name suggests, the excess in home insurance implies a high degree of transparency between you and your insurance company. It is either at the time of subscription or at each significant change in your life that is likely to change your contract that you should think about the issues surrounding your coverage to get the best guarantees if necessary.

Remember the basics of the multi-risk housing contract (MRH) by consulting the dedicated file.

(1) https://www.service-public.fr/particuliers/vosdroits/F31257

(2) http://www.senat.fr/rap/r19-480-1/r19-480-19.html