Learn how a voluntary deductible vehicle insurance option works, how it differs from the compulsory deductible, and when to choose it. Get a quote today.
A deductible is the part of a claim that you pay yourself. A compulsory deductible is part of every claim. A voluntary deductible is an extra amount you choose to pay, and it can lower your premium.
It sounds simple, but you should choose it with care. Here is how it works.
What is a deductible?
When you make an own damage claim, the insurer does not always pay the full repair bill. You pay a small part first. This part is the deductible. In some places it is also called "excess".
The insurer pays the rest, as per the policy terms. You also pay for items that are not covered, such as normal wear and tear.
What is a compulsory deductible?
The compulsory deductible is fixed. It is part of every claim, and you cannot remove it. It is set as per the policy terms and rules.
You do not choose it. You only need to know that it exists, so you are not surprised at the garage. Check your policy wording to see the amount for your vehicle.
What is a voluntary deductible?
The voluntary deductible is an extra amount that you agree to pay in a claim, over the compulsory one. You choose it when you buy or renew your policy.
In return, the insurer may offer a lower premium. The higher the amount you choose, the lower the premium may be. The exact discount depends on the insurer and the plan. We cannot promise a fixed saving.
A simple example
Think of a repair bill after an accident. In a claim, you first pay the compulsory deductible. If you also chose a voluntary deductible, you pay that amount too. The insurer pays the rest, subject to policy terms.
If you had not chosen the voluntary deductible, you would pay less in the same claim. So you save on premium, but you pay more at the time of a claim. Your policy document shows the exact amounts for your vehicle.
When does a voluntary deductible make sense?
It may suit you if:
- You are a careful driver and rarely have claims.
- You can pay a higher amount from your own pocket if needed.
- You want to lower your premium for the year.
- You are likely to handle small repairs yourself anyway.
It may not suit you if:
- You drive in heavy traffic every day and have frequent small accidents.
- You cannot easily pay a big amount at a short notice.
- Your vehicle is new and costly, and you want less to pay in every claim.
Link with No Claim Bonus
No Claim Bonus (NCB) is a discount on the own-damage premium for claim-free years. Usual slabs are 20% after 1 year, 25% after 2, 35% after 3, 45% after 4, and 50% after 5 or more claim-free years. If you make a claim in a year, you lose the NCB for that year.
This matters because for a small repair, it may be better to pay yourself and keep your NCB. A voluntary deductible works well with this thinking. See our no claim bonus page for details. You can also read our post on how to reduce your car insurance premium.
Things to check before you choose
Ask these questions before you pick a voluntary deductible.
- What amounts are offered for my vehicle?
- How much will my premium change?
- Does it apply to every own damage claim?
- Does it affect the third-party part? (Usually no, it is for own damage.)
- Will I be able to pay this amount when needed?
The deductible does not apply to the third-party part of the policy. Third-party cover pays for injury, death or property damage to another person. Injury or death liability is unlimited, and property damage liability is limited to ₹7.5 lakh.
How it affects your claim
At claim time, the steps are the same. Inform the insurer quickly. Inform the police for theft, major accident, third-party injury or death, and riot. Do not move or repair beyond need before the survey. The surveyor checks, you send documents, repair is done, and the claim is settled.
In a cashless claim, you repair at a network garage and the insurer pays the garage directly. You pay the deductible, plus non-covered items. In reimbursement, you pay first and claim back with bills. The deductible is cut from the claim amount. Read our post on cashless vs reimbursement claims. Our claim support page also helps.
Do not choose only for a low premium
A low premium is nice, but cover is what matters. Do not pick a very high voluntary deductible only to cut the cost. If you have to pay a large part of every claim, the policy may feel less useful. Balance the premium with your budget and your risk.
Also compare other parts of the policy, such as IDV and add-ons. IDV is the market value of your vehicle agreed with the insurer, and it is the most you get for total loss or theft. See comprehensive insurance or get a quote to compare.
Rules and options can change and differ by insurer. Your policy document is final.
FAQs
Is a voluntary deductible compulsory?
No. It is your choice. The compulsory deductible applies to every claim, but the voluntary one is optional.
Will a voluntary deductible always lower my premium?
It may lower it, but the amount depends on the insurer. Check your quote.
Does the deductible apply to theft claims?
Policy terms decide this. Check your policy wording for how deductibles apply to different claims.
Can I change the voluntary deductible later?
Usually you can choose it again at renewal. Ask your insurer if it can be changed in between.
This guide is for information only. Rules and policy terms can change, and the policy document is final. Please read your policy wording.