When you face damage or medical costs, you will likely encounter a deductible in your insurance. This means you first pay part of the costs yourself before your insurer pays out. Although this concept is familiar to many people, legal disputes regularly arise in practice about the application and the amount of this sum. Insurers often rely on policy terms to reduce payouts.
It is therefore crucial that you, as a policyholder, know your rights. In this article we explain how the deductible works for different types of insurance, which rules apply and what you can do if you disagree with a decision by your insurer. Whether it concerns a health insurance policy or an auto insurance, a good understanding of your legal position can save you a lot of money.
What is a deductible insurance and how does it work?
The concept of a deductible insurance is basically simple: it is the amount that you as the insured pay yourself in the event of damage or medical treatment, before the insurer reimburses the rest. This mechanism was introduced to limit administrative burdens and costs for small claims. If insurers were to reimburse every minor claim of a few tens of euros, premiums would become unaffordable for everyone. The deductible also acts as a financial incentive to be more careful with property and health.
In practice, the deductible works as follows: suppose you have an auto insurance with a deductible of € 300,-. You accidentally cause damage of € 1.500,- to your own vehicle and report this to your insurer. The insurer assesses the claim and, if the damage is covered, pays out € 1.200,- to you or the repairer. The remaining € 300,- is for your own account and is directly deducted from the payout. The deductible can apply per event or per calendar year, depending on the type of insurance and the specific policy terms. With a health insurance, for example, the deductible applies per calendar year, while with an auto insurance it is often applied per claim.
The difference between mandatory and voluntary deductible
With many insurances, and in particular with health insurance, a distinction is made between a mandatory deductible and a voluntary deductible. The mandatory deductible is a legally determined amount that every insured person aged 18 and older in the Netherlands pays themselves for care from the basic insurance. The government determines the amount annually. You have no choice: you are legally obliged to pay this amount before your health insurer reimburses the medical costs. There are exceptions, such as visits to the general practitioner, midwifery care and maternity care. For these, no mandatory deductible applies.
In addition to the mandatory deductible, many insurers offer the choice for a voluntary deductible. This is an extra amount on top of the mandatory deductible. In exchange for this higher financial risk you receive a discount on your monthly insurance premium. The voluntary deductible is a contractual agreement between you and the insurer, recorded in the policy terms. You make the assessment yourself based on health, financial buffer and risk appetite. Legally you are bound to this choice for the duration of the insurance year.
Deductible with health insurance: what you need to know
The health insurance is for most Dutch people the insurance where they most often deal with the deductible. As mentioned earlier, a legally mandatory deductible applies to care from the basic insurance. The deductible is calculated per calendar year. If you incur medical costs in a year that fall under the deductible, you pay these yourself until the maximum is reached. After that, your health insurer reimburses the costs fully, provided the care falls under the coverage of the basic insurance. The moment of the treatment determines the calendar year to which the costs are attributed.
In practice there is often unclarity about which care does and does not fall under the deductible. Visits to the general practitioner fall outside the deductible. If the general practitioner draws blood or refers you to a medical specialist in the hospital, then these follow-up costs do fall under the deductible. If you end up in a conflict with your health insurer about the application, consider filing a complaint with the Kifid. This is the independent complaints institute for financial services.
How does the deductible work with an auto insurance?
With an auto insurance, the deductible works differently than with a health insurance. With health insurances it applies per calendar year. With auto insurances it is generally applied per claim. If you drive damage three times in one year time, then you also pay the deductible three times. This can add up considerably and is an important factor when taking out an auto insurance.
The deductible only applies to the casco coverage (WA+ or Allrisk) and not to the mandatory WA insurance. The WA insurance covers the damage that you cause to others with your vehicle. For this, legally speaking, no deductible applies for the injured party.
With auto insurances you can often buy off or reduce the deductible. Insurers offer this option for a higher premium. If you have the damage repaired at an affiliated damage repair company, then often a reduced or even zero deductible applies. This is a form of steering by the insurer. Check legally whether your policy terms oblige you to use an affiliated repairer. For more information about legislation you can consult the website of the government via wetten.overheid.nl.
Disputes with your insurer about the deductible
Despite clear policy terms, disputes regularly arise between insured parties and insurers about the application and the amount of the deductible. A common cause of conflict is the interpretation of the policy terms. Insurance terms are often drawn up in complex legal language. For the average consumer it is therefore difficult to fathom the exact meaning.
Insurers have the tendency to interpret policy terms strictly to their own advantage. This can lead to rejection of a claim or application of an unjustified high deductible. In such cases it is important to know that unclear policy terms must be interpreted to the disadvantage of the insurer.
Another common point of dispute is the question whether there is a matter of one or multiple damage events. This is particularly relevant with insurances where the deductible applies per event. Suppose: your home gets damaged during a severe storm. A day later extra damage arises due to a leakage as a result of that same storm. Is this one damage event or are there two? The insurer possibly argues that it concerns two separate events. In these kinds of complex situations it is very wise to call in the help of a specialized insurance law lawyer. A lawyer can analyze your policy terms and assist you in the discussion with your insurer.
The role of the policy terms with a damage claim
The policy terms form the foundation of the agreement between you and your insurer. In these terms all rights and obligations of both parties are accurately described, including the rules regarding the deductible. It is of essential importance that you read and understand the policy terms well before you take out an insurance. Unfortunately many people do not do this. They only discover at a damage claim which limitations and exclusions apply.
The policy terms not only determine the height of the deductible, but also in which specific situations this applies. For example, an increased deductible can apply for young drivers with an auto insurance.
Legally speaking, the policy terms are binding, provided they are not in conflict with the law or can be regarded as unreasonably onerous. The law offers consumers protection against unfair clauses in general terms and conditions. If a provision about the deductible is unreasonably onerous, then a judge or the Kifid can annul it. The provision is then declared invalid and the insurer can no longer appeal to it. If you doubt the validity of a policy condition, then it is advisable to obtain legal advice.
Frequently asked questions
Can I pay my mandatory deductible with the health insurance in installments?
Yes, most health insurers offer the possibility to pay the mandatory deductible in installments. This can help you to better spread unexpected high medical costs over the year. You often have to request this in advance from your health insurer. Contact your insurer to discuss the possibilities for a payment arrangement.
Does the deductible also apply to the WA insurance of my car?
No, the deductible is generally not applicable to the mandatory Third Party Liability insurance (WA) for motor vehicles. The WA insurance covers the damage that you cause to others. The deductible generally only applies to the casco coverage (Limited Casco or Allrisk), which covers the damage to your own vehicle.
What should I do if my insurer charges an unjustified deductible?
If you are of the opinion that your insurer wrongly charges a deductible or applies a too high amount, you must first of all submit a formal complaint to the insurer itself. If this does not lead to a solution, then you can present the complaint to the Kifid or take legal steps with the help of a specialized lawyer.
Read also
- Objection against insurer: what can you do at a rejection?
- Rejection of damage by insurer – what can you do?
- Filing a complaint with the Kifid – your rights, step-by-step plan and tips
Need help?
Do you have a dispute with your insurer about the deductible, or does your insurer wrongly refuse to pay out a claim? The legal experts of Arslan & Arslan Advocaten are ready for you to advise and assist you in your conflict. We have years of experience in insurance law and know exactly how we can best defend your rights. Do not let yourself be fobbed off with unclear policy terms. Contact us for a free first consultation via our website: https://arslan.nl/contact/ and discover what we can mean for you.