As a car owner, a vehicle insurance policy is a regulatory requirement. Of the different types of insurance plans, a third-party policy is the minimum required mandate. However, insurance experts recommend you avail the policy with a broader coverage — a comprehensive policy. Unlike a third-party policy, a comprehensive plan protects against legal liabilities payable to a third person for injuries and damages.
Since a comprehensive plan has a broad insurance cover, it comes with a steeper price tag. For that reason, many owners avoid buying a comprehensive insurance cover. But there are a few nifty tricks to keep your 4 wheeler insurance premiums in check even when you are opting for broad insurance coverage. One such way is by opting for a voluntary deductible when buying a car insurance policy.
This article explains how it can help you lower the premium and some facts about it.
What is a voluntary deductible and how does it help in lowering the premium of your car insurance policy?
The voluntary deductible is a fixed amount which the policyholder agrees to pay from their pocket at the time of the claim when buying the car insurance policy. While the compulsory/standard deductible is mandatory in nature, the voluntary deductible is an optional choice of the policyholder.
When you opt for a voluntary deductible, your liability for the insurance premiums reduces. This results in you to shoulder higher out-of-pocket expenses during the time of an insurance claim. Thus, it must be a calculated choice to opt for voluntary deductibles to lower car insurance prices. * Standard T&C Apply
Facts about voluntary deductibles
Here are four facts to keep in mind when you opt for a voluntary deductible in your insurance plan.
- You are required to pay the voluntary deductible only when you raise an insurance claim
Whatever amount of voluntary deductible you opt for, it is required to be paid only when you make an insurance claim. Further, this amount of voluntary deductible is only required to be paid on approval of your insurance claim. After payment of the voluntary deductible, the insurer will settle the remaining amount of the bill with the service garage. *
- There is a difference between voluntary deductible and co-payment
Often buyers believe that voluntary deductible and co-payment are the same. In reality, the voluntary deductible is a fixed amount which the policyholder must pay at the time of the claim whereas the co-pay is a specified percentage of claim expense that the policyholder agrees to bear. *
- Voluntary deductibles are not an added expense
It is often believed that voluntary deductibles are an additional expense that the insured must pay. However, as a policyholder, you need not pay anything additional to opt for voluntary deductibles. It is a choice that the policyholder exercises to bear a specified amount at the time of claim for which the insurer, in return, offers a markdown in the premium. *
- Compulsory deductibles are not eliminated when you opt for a voluntary deductible
It is not possible to get rid of the compulsory deductible even if you opt for a voluntary deductible in your premium. The compulsory deductible is a fixed amount set by the regulator. *
* Standard T&C Apply
Finally, remember, when you choose voluntary deductibles in your policy, you can avail of a concession in your overall insurance premium. To know how much, make use of a car insurance premium calculator.
Insurance is the subject matter of solicitation. For more details on benefits, exclusions, limitations, terms, and conditions, please read the sales brochure/policy wording carefully before concluding a sale.