With the presence of franchise conditions in the agreement, property insurance franchise becomes a very common form of insurance and the number of such agreements is growing uncontrollably. The attractiveness of property insurance with a franchise is obvious and mutually beneficial for both parties to the agreement signatory. The possibility of not covering part of the damage caused, in monetary terms, which is not returned to the beneficiary and is not paid by the insurer, in the event of an insured event - the so-called franchise, when insuring movable and immovable property, has its positive aspects. For the insured, the presence in the agreement of a stipulated, conditional deductible, in a fixed amount or a proportional percentage of the amount of insurance or by the percentage of the forfeiture, allows saving money when you issue a policy. The beneficiary gets the opportunity not to prematurely terminate the contractual relationship on the insurance policy, to preserve the integrity of the insurance payment, and to receive it when more significant damage is caused to material values. With insignificant losses, for little money, he is ready to independently, voluntarily cover his losses, without requiring monetary compensation from the company.
Reflection in the actuarial contract, the percentage of the franchise, provides an opportunity to be in the black to both parties to the contractual relationship. In the presence of insignificant property and monetary losses, in the form of minor damages, scratches, cracks, losses by water from heating systems, or a breakthrough of the sewage system, it is easier for the insured to eliminate minor problems himself, minor repairs of the property, than to get involved and engage in ‘paperwork’, filling the ‘heap’ documents when registering monetary compensation. Besides, the process of paperwork itself can entail indirect costs, much more than the quantity of damage incurred, plus the time, effort, and ‘nerves’ that are not worth it. To express the effectiveness of the franchise for the insurer and the policyholder, the quantity of the confirmable must exceed the amount of the minimum possible forfeiture and satisfy both parties to the contracting parties. By types, in addition to the conditional deductible, property actuarial, other options are applied - unconditional, temporary, dynamic, the basis of which is the terms of payment. If in a property insurance agreement with a conditional confirmable, the percentage of damage and the maximum total indicator, which is prescribed in the agreement, is of primary importance. When reflected in an insurance contract - an unconditional deductible, it means a situation created when the amount of property damage is not subject to compensation by the insurer and is deducted in the calculation if the loss does not exceed the amount of the deductible, so it not be reimbursed to the policyholder.
Reflection in a property insurance contract - a temporary confirmable, means a situation in which possible material losses of the policyholder are valid in a certain interval on the dates of the specified term of the deductible. If with a temporary deductible, the due date of the insured event has expired, then the insurance compensation is not valid and is not paid. The amount of dynamic deductible property insurance depends on certain conditions and may vary. The amount of damage that is not subject to compensation varies and manifests itself in different insurance companies in different ways, for example, in the first insured event, one hundred percent is compensated, then the quantity of payment is reduced by 20% or more. The profitability of property insurance with a franchise has unambiguous and unconditional merit, designed to ensure guaranteed protection of the safety of the property of individuals and legal entities, for a certain fee. The use of an insurance franchise mechanism provides an opportunity to reduce the costs of the insured and save the beneficiary's reimbursing material losses money.