The franchise can be considered as a unconditional obligation from the insurance company to compensate at own expense a part or the caused losses in the set cases and in the set size.The franchise in auto insurance can be conditional and unconditional.

The franchise can be considered as a unconditional obligation from the insurance company to compensate at own expense a part or the caused losses in the set cases and in the set size.The franchise in auto insurance can be conditional and unconditional.

In the case when the contract sets insurance with an unconditional franchise at payment of the insurance indemnity the size of the indemnity sets without the size of the franchise anywhere.
In some cases that the insurance indemnity is covered by franchise the insurance company pays to the insurant nothing.

Example: The unconditional franchise is set as 5% of the insured sum in 10 thousand dollars, that is $500. The loss in a road accident is $1200. So the client will receive 1200 - 500 = 700 dollars.

The conditional franchise: in this case the insurant assumes indemnity engagements at own expense if they are under the set size. If the loss size excess amount the insurance company will compensate the caused losses in full.

For example: the insurance contract sets a conditional franchise in $500. All losses under $500 the insurance will compensate at own expense. If the loss is $600 the insurance company will compensate all $600.

The franchise amount can be set in percents of insurance amount or in absolute value (monetary).
In some cases franchise can be set in percents of the caused losses size.

At will of the client almost all auto insurers execute contracts with fraznchise. More often contracts with an unconditional franchise are met.
At some contracts the insurance company sets the franchise without fail. For example, in contracts where the small fault risk is high.

It is really to save at buying a policy with franchise. From some franchise size the price of the insurance contract starts to reduce. Besides the client saves his time not making out a heap of certificates for a couple of scratches.
And that who regret money for even small repairs have to drive more carefully. But even that is most likely a positive side for the automobile owner.  More information about insurance please read here: http://www.insure4usa.com