Franchise Deductible

A franchise deductible is a limit included in some insurance policies. Covered losses which fall below the franchise deductible threshold must be covered by the policyholder. Covered losses which are higher than the franchise deductible are paid for by the insurance provider in full.

Example:

An insurance policy has a franchise deductible of 1000 Swiss francs. A covered hazard results in 950 francs of damages. The policyholder must cover the full cost out of their own pocket. If a covered hazard were to cause more than 1000 Swiss francs in damages (1500 francs, for example), the full cost of the damages would be covered by the insurance company.

Important: The term franchise deductible should not be confused with the German/French term Franchise which is used by Swiss health insurance providers and denotes a standard deductible.

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