Expert advice in minutes not days. Register it's free and ask your first question now.
ReachBack is a free community help desk for construction professionals run by Built Intelligence. A library of high-quality questions from real users with answers delivered and curated by industry experts.

5,851 questions

6,280 answers


Register its Free

Download here

Why are deductibles (or excesses) applied to insurance policies?

+1 vote

Why are deductibles (or excesses) applied to insurance policies?

asked Oct 11, 2012 in Risk and Insurance by BuiltIntelligence (870 points)  

1 Answer

+1 vote
Best answer

They are applied in order to:

  • Reduce the risk which the insurer takes on.
  • Ensure that the insured party retains a degree of liability by having to pay a deductible (or excess). This motivates him to take more care in avoiding the loss or damage.
  • Decrease the level of premiums paid by the insured party
  • Negate the administration costs of processing a large volume of small claims.
answered Oct 11, 2012 by BuiltIntelligence (870 points)  
edited Nov 9, 2012 by Rob Glasspool