Categorized | Car Insurance

what is a voluntary deductible option?

If you have planned to purchase a new car, then it is vital to know which car insurance suits you the most. When you opt for cheap car insurance, it prevents you from getting cash-strapped in the event of a mishap. These days more and more car owners have started showing interest in car insurance policies. Today, the situation is such that owners are comparing different car insurance Premium quotes from various insurance companies before making their choice. This attitude of owners plays a major role in reducing the money spent for car insurance premium. Are you one of them? If yes, then you can hit upon several attractive offers as well.

What you need to know about Voluntary deductibles

You can save spending more money in the form of periodical premiums for your vehicle based on your driving skills. One of the ways is voluntary Deductible option. Are you wondering what it is? It is the minimum amount that is declared by the Policyholder for bearing the expense at the time of claim. Premium and deductible are inversely related. The less premium you pay more is the deductible in the event of a claim, and those who believe they have good driving skills can use this to save on premium and reduce the Risk of accidents.

How voluntary deductible works:

In case you have a Claim amount of Rs 10,000. Let’s say Rs 500 is the mandatory deductible and you have declared the voluntary deductible amount as Rs 1,500, then you have to pay Rs 2,000 initially. Rest of the amount i.e. Rs 8,000 will be payable by the insurance company. If you hadn’t opted for the additional voluntary deductible of Rs 1,500, you would have paid extra money through premium. Those who risk the incident of a claim less can use this inverse relation to their advantage.

The insurance premium is never a fixed amount. It keeps changing with every insurance company. In fact, it is advisable to first make a good comparison of the prices of various companies before taking the final decision.
 
The levels of discounts that you get with voluntary deductible option

Usually, the insurance companies offer you four different levels of discounts. Let’s say the least amount of voluntary deductible that you can offer to pay is  2,000, in addition to a compulsory deductible of Rs 1,000. When you opt for a claim of say Rs 25,000, you are supposed to make this combined payment of Rs 3,000. This payment will be considered as a part of the claimed amount. The insurance company will pay the remaining portion of the claimed amount for you. If you are a policyholder, let us say you get a discount of Rs 750 for this choice of voluntary deductible.

Policyholders may be able to choose payment levels starting from Rs 2,000. The highest voluntary deductible a policyholder can make is Rs 20,000, and the discount for this is Rs 10,000. By taking a chance on Rs 2,000 and Rs 20,000, you can save Rs 750 and Rs 10,000, respectively. This could be a fair deal depending on the driving skills of a policyholder and his or her confidence. Hence, there is no denying that voluntary deductibles play a major role in reducing your car insurance.