A Close Look At The Role of The Deductible In An Insurance Claim

All taxpayers understand the meaning of a deduction. By listing deductions on a tax form, a taxpaying citizen can deduct from (take away from) the amount that he or she owes in taxes. When an insurance company has determined what it will make in the way of deductions, the policy holder that has made a claim has to pay a deductible. The deductible is a fixed amount. That amount represents what must be paid the insurance company before any claimed compensation can get delivered to the policy holder that has claimed it.

The stated and actual purpose of the deductible

According to insurers, the deductible serves two purposes. It reduces the number of claims made by policy holders. At the same time, it lowers can insurance rates. In actuality, the existence of the deductible affects the claim process in two very different ways. It reduces the degree of exposure experienced by the insurance companies. In addition, it places a limitation on the accident victim’s ability to recover some type of compensation.
The deductible does not eliminate the victim’s ability to recover some compensation. In fact, certain damages are not covered by the deductible. Hence, a victim should expect full compensation for such damages. The losses that get fully compensated are those that concern a loss of income and those that result from payment of out-of-pocket expenses.
In addition, there are times when a deductible cannot be applied to the amount that will be awarded an accident victim. Sometimes, the pain and suffering endured by such a victim has been so great, that the court awards that same person a huge benefit, in response to an injury claim. At such a time, the insurance company will not demand payment of a deductible.

A closer look at the insurer’s willingness to forgo the deductible

No insurer likes to appear greedy. Indeed, obvious greed on the part of an insurer can lead to charges of bad faith. The court can fine an insurance company that has been charged with bad faith.
The willingness to forgo payment of a deductible serves to make an insurer appear anything but greedy. You must recognize the company’s readiness to do without a payment that it would normally expect. Seldom, though, does any person ever take the time to calculate what percentage of the huge award would be covered by the fixed amount of the deductible.
The company’s apparent sacrifice might be likened to that of a bank that has a fixed fee for all customers, and then promises to remove the fee charges on accounts that hold a certain large amount. In comparison to the amount in a large account, the fee seems like cents. In other words, the insurance company sacrifices only cents, when it forgoes a deductible, if the award for pain and suffering rises to a given level. If you are looking for more information about the deductibles on the insurance claim, it is good to talk with an injury lawyer in Huntsville.