What does the optional zero deductible for motor vehicle damage insurance mean?
3 Answers
An absolute deductible refers to the loss within the deductible amount, which is entirely borne by the insured, while the insurer is only responsible for the compensation amount that exceeds the deductible and is within the compensation limit. Relevant provisions on the deductible: The "Model Clauses" stipulate that the absolute deductible is negotiated and determined by the policyholder and the insurer at the time of insurance. This insurance adds an absolute deductible for each accident on the basis of implementing the deductible rate. Introduction to relative deductible: A relative deductible refers to the threshold amount at which the insurer begins to compensate for the loss of the insured subject. This means that a certain amount (or percentage) is stipulated in the insurance terms. Only when the loss of the insured subject reaches this amount (or percentage), the insurer will compensate in full without any deduction; otherwise, no compensation will be made.
I was also confused by this option when I first bought my car. Choosing 'Zero Absolute Deductible' means the insurance company allows you to set a condition where there's no threshold for claims under the auto damage insurance. Normally, auto insurance might have a deductible—for example, if the accident damage is 1,000 RMB, you'd have to pay a few hundred yourself before the insurer covers the rest. But selecting 0 RMB means no matter how small the loss, the insurance company will fully cover it, and you don't have to pay a cent. The advantage is convenience and peace of mind, especially for minor scratches or repairs—just go through the claims process without needing to pay upfront or worry about money. However, the downside is that the premium might be higher since you're assuming less risk. I think this option suits those who dislike hassle or are new car owners. For instance, when I first got my new car, I chose it to avoid unexpected expenses. Of course, always read the policy terms carefully before buying insurance and choose based on your driving habits—don't blindly follow trends. Remember, while good coverage is great, it's also about balancing your budget.
As a cost-conscious car owner, choosing a zero deductible is essentially a cost-benefit trade-off. It means the insurance company allows you to set the deductible to zero. The deductible is the portion you pay out of pocket before the insurer covers the rest—setting it to zero removes this threshold, meaning the insurer covers the full loss. However, opting for this usually increases your premium. For example, if your original premium was 5,000 with a 500 deductible, choosing zero deductible might raise the premium to 5,500. The upside is that you won’t have to pay anything out of pocket in case of an accident, making minor repairs hassle-free. My advice is to assess your driving risk: if you’re a safe driver or own an older car, a higher deductible saves you more on premiums. But if you frequently drive in urban areas or own a new car, zero deductible helps avoid unexpected expenses. Crunch the numbers to ensure the premium increase doesn’t outweigh the potential savings.
