Most vehicle owners, especially newly acquired ones, consider it necessary to insure their car. Having acquired an insurance policy, the policyholder believes that he has every right to count on receiving the full cost of the damaged car if an insured event occurs. And even in the case when the car cannot be restored due to catastrophic damage, the insurance company will pay compensation for the former car in full. In this matter, most customers tend to be disappointed. Indeed, the amount of compensation paid by the insurer is sometimes dramatically different from the amount that the client expected.
Abandon in insurance is ...
The term abandonment comes from the French "abandinner" - leave. Abandon in insurance is the refusal of the client of the insurance company or the beneficiary specified in the contract of the property, which is listed in the insurance contract, in favor of the insurer. The client can perform such an action only on property insurance policies, which include CASCO. The use of abandon in car insurance is due to the fact that the client of the insurance company does not have the desire to sell the remains of the damaged car and, as a result, receive insurance compensation in an amount less than the insurance amount.
Abandon Act
To date, the concept of abandonment of property is enshrined in the Federal Law “On the organization of insurance business in the Russian Federation”. The policyholder has the full right to refuse property owned by him, damaged or destroyed as a result of the insured event, in exchange for receiving the full insurance amount, based on the provisions of paragraph 5 of article 10. Given this, when asked about which insurance is often used Abandon, the only correct answer is that Abandonment is applicable only if the policyholder has a property or car insurance contract.
Policyholder choice: transport or abandon
By concluding a vehicle insurance contract, the client of the insurance company must study its rules. In addition to the sum insured, the size of the insurance payment, it is necessary to familiarize yourself in detail with the conditions for the payment of insurance compensation, risks and exceptions. Abandon in car insurance according to CASCO is the right of the insured to receive the full insurance amount for the damaged car.
There are situations when after an emergency transport event, the car is damaged by more than 70%. In insurance, such an event is considered constructive loss of the vehicle, or total damage. If this is the case, in most insurance companies, according to the current insurance rules, they pay out the sum insured. However, it is reduced by the cost of car balances, which the policyholder can still sell. In this situation, the client is faced with a choice: to look for buyers for the remnants of the car that are suitable for sale or to use abandon in insurance, the procedure of which is less tiring.
Constructive death
As statistics show, most customers of insurance companies do not read the entire insurance contract. They are sure that having a CASCO document signed on both sides in their hands upon the occurrence of an insured event, they have the opportunity to compensate the damage received in full.And if the car is impossible or too expensive to repair, then the insurer will pay its full cost.
Everything is not so clear. Total damage is recognized if during the insured event damage to the insured property occurred, and the cost of repair work or full restoration is 70 percent or more of the real value at the time of the accident or other insured event.
In order to save on insurance payments, policyholders often conclude CASCO agreements with determination of the insured amount not at the market price at the time of insurance, but at the contract price. As a result, the amount of insurance compensation for constructive loss of a vehicle will not be able to fully cover the resulting damage.
Insurance Contract and Abandon
By concluding a car insurance contract, a potential customer is obliged to study all of its items. There are companies that do not prescribe an abandon procedure in insurance contracts. In insurance, this is fixed at the legislative level, it should be written in the rights of the insured, which are specified in the rules and policies. Having familiarized with the insurance conditions, the client must learn in detail his rights, as well as what is an abandon in insurance and obligations in the event of an insured event. In the same way, the insurance company is obliged to familiarize the insured with his duties and rights.
The abandon procedure is made out in two ways:
- prescribed in the insurance contract;
- an act is concluded on the transfer of rights to damaged insured property.
Decoration abandon
In accordance with the legislation of the Russian Federation, there are two possibilities to apply for an abandon procedure in insurance. It is possible in such situations:
- The current contract between the insurer and the policyholder has clauses that disclose the payment procedure, including the abandon. According to the provisions of this document, the client of the insurance company has the right (not obligation) to use an abandon, that is, transfer his car to the company in exchange for a reimbursement in the amount of the sum insured. Consent for this insurer is not required.
- A bilateral document is drawn up, according to which the policyholder - the owner of the vehicle transfers the ownership of the insurance organization. The insurer will become the full owner only after compensation for the damage received.
Thus, in any of the options, the policyholder has the right to use the abandon procedure in insurance. A sample document on the transfer of rights should include information about the parties that sign it, data on the object of alienation.
Abandon pitfalls in insurance
It should be remembered that all the conditions prescribed in the insurance contract must be carefully studied. There are situations when the policyholder decides to exercise his right to abandon. He expects that after the car is handed over to the insurance company, compensation will be transferred to him in the amount of the full insurance amount. As practice shows, it is profitable for insurers to determine the constructive loss of a vehicle and recommend that customers use the abandon procedure.
In many CASCO agreements, in order to reduce insurance payments, customers are offered to conclude an insurance contract taking into account worn-out cars. If the client has a contract with this condition, then when determining the amount of insurance compensation, the insurance amount will automatically be reduced by the amount of depreciation depreciation. In addition, the deductible amount specified in the insurance document must be taken into account. Therefore, using his right to refuse property, the policyholder can receive a significantly lower amount of compensation than he expected. Such cases are not uncommon.
Some nuances of abandon in insurance
You should know that:
- not only damage to the car, but also its loss (hijacking) are considered conditions for the policyholder to give up his right to a vehicle;
- the insurance amount cannot exceed the real market value of the car at the time of signing the insurance contract;
- an agreement on the transfer of rights to property must be signed only with the insurance company, and not with third parties;
- the procedure for transferring balances is determined by the policyholder, unless otherwise specified in the contract.
The most important thing when concluding a CASCO insurance contract is to read all of its paragraphs and subparagraphs in detail. It is advisable to invite a lawyer for this.