What,are,Deductibles,the,Car,I finance, share, loan What are Deductibles in the Car Insurance Policy?


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In India, there is a provision of compulsive insurance cover on the vehicle, which is why car buyers head to the insurance company soon after they purchase a car. However, they often get confused by the technical jargons and varied clauses that are typically involved with the car insurance policy. Seeking enlightenment and looking for ways to lower premiums is the only way to come out of this safe. Deductibles are other important factors that have to be taken special care of. You must enquire about the deductibles at the time of purchasing the policy. Given below is a small lowdown on the types of Motor Insurance Policies and deductibles applicable to each. Types of car insurance policies
  • Third-party liability only policy: It is a mandatory policy that a car owner has to particularly purchase before plying vehicle on the road. This policy covers the damage caused to any third party and the premium is quite low too.
  • Comprehensive coverage policy: This policy can be voluntarily availed by the policyholder to get optimum coverage on his vehicle and provides all round protection whenever anything goes wrong. It covers for all the damage incurred on the vehicle in case of theft, robbery, fire and other third party damage. While the third-party liability only policy is compulsory to own, to purchase or not to purchase this policy is your choice.
  • What are the deductibles? Deductibles are part of the claim that has to be paid by the policyholder before the insurance company pitches in and takes the responsibility of the remaining claim. Deductibles are of two types: Compulsory deductibles and voluntary deductibles.
  • The compulsory deductible amount is fixed by the insurer and it is obligatory by the policyholder to pay the deductibles whenever any claim arises. According to the IRDA, the amount of Compulsory Deductible varies from Rs.50 for two-wheelers to Rs.500 for four-wheelers. The insurance company may charge a higher deductible if the car is older and presents a larger risk of claim or for cars with higher cubic capacities or in other circumstances where the risk of a claim is perceived to be higher. You cannot lower the premiums for compulsory deductibles and premium is calculated taking into consideration other factors such as IDV, make, and model.
  • The voluntary deductible is the limit chosen by the policyholder to meet a part of the claim from his own pocket before raising it to the insurer. A number of deductibles here depend on the policyholder who chooses the limit factoring in his affordability and risk. Choosing a higher amount of Voluntary Deductible causes a lowering in premiums through discounts.
  • Deductibles are important in your car insurance policy and should be carefully planned to keep in mind the affordability in the case of voluntarily deductible clause because the discount in the premiums is not the only deciding factor. Also, you should make sure that the savings in premiums outweigh the out-of-pocket expenditure required at the time of claim. So if you are a wary person with sufficient income, opt for a higher voluntary deductible instead. However, if you are someone with rash driving skills or with a lack of extra money at the time of claim, either avoid choosing voluntary deductibles or go for a very low amount.

    What,are,Deductibles,the,Car,I

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