Raising deductibles like that, can save an insurance company millions every year, so it doesn't surprise me they could offer lower rates.
When I was in the business, our provincially run insurance, ICBC, did this, and I noticed claims, especially comprehensive dropped significantly. Whereas previously, a parking lot ding, shopping cart scratch type damage, was always claimed, as it only cost $100 deductible, as soon as it went to $300, people would just live with the damage, or touch it up themselves. Broken side windows from break in's, often cost just under the $300 deductible to replace, so again it comes out of the owners pocket.
In collision type of claims, most people just ate the higher deductible, or, if the damage amounted to less than $500 total, some owners again, just lived with the damage. Some of course, would pay a shop privately to get the work done. Cash deals, to avoid taxes was becoming quite popular. Bonus doing that was, there is no record of repair on your vehicle, when it came time to sell the car.
Problem with just leaving damage, or perhaps touching it up themselves (as people found out later) was, say your car was in an accident, and was damaged in the exact same area that had sustained damage previously. ICBC could and would,
depreciate the repair and paint, (or part itself, if it needed replacing) because of the previous damage. The insured could then have to pay the repair shop an additional amount, to have it repaired properly.
The use of touch up paint on a scratch, was one of the easy ways that ICBC could prove the panel had sustained previous damage. Any previous collision damage left un-repaired was pretty obvious.
So a lower premium, but higher deductible, may not always be such a great deal after all..except for the insurance companies..
AC
Linear Mode
