Augusta
VIP Contributor
The insurance policy comes with deductibles aid insurance providers to share costs with insured when they make claims.
They are other reasons that insurance companies use deductibles apart from just sharing cost with the policyholder. They are outlined below,
To curb behavioral risk of the insured .
Having deductibles in place it will help to curb any behavioral risk that would be displayed by the insured and this will enable the policyholder act in good faith. The insured party will know that engaging in risky behavior will bring financial consequences to him or her
With deductible a driver that leaves a vehicle unattended in a dangerous area and it result in theft with deductible will go in for it as it's penalty. So a deductible curbs unnecessary risk because the insured is responsible for a portion of the costs.
To ensure financial Stability
Insurance deductibles helps to provide financial stability to the policyholder by taking away the seriousness of claims. Now if an insurance policy didn't come with
deductible. The cost of every minor claim no matter the amount would be the insurance company responsibility. with this it will come with overwhelming number of claims for the insurer
So this will bring increase in the financial costs of the policy. which will induce financial instability.
They are other reasons that insurance companies use deductibles apart from just sharing cost with the policyholder. They are outlined below,
To curb behavioral risk of the insured .
Having deductibles in place it will help to curb any behavioral risk that would be displayed by the insured and this will enable the policyholder act in good faith. The insured party will know that engaging in risky behavior will bring financial consequences to him or her
With deductible a driver that leaves a vehicle unattended in a dangerous area and it result in theft with deductible will go in for it as it's penalty. So a deductible curbs unnecessary risk because the insured is responsible for a portion of the costs.
To ensure financial Stability
Insurance deductibles helps to provide financial stability to the policyholder by taking away the seriousness of claims. Now if an insurance policy didn't come with
deductible. The cost of every minor claim no matter the amount would be the insurance company responsibility. with this it will come with overwhelming number of claims for the insurer
So this will bring increase in the financial costs of the policy. which will induce financial instability.
