Car owners must be familiar with the concept of car insurance deductibles. If you are new to the world of car insurance, we will provide you with all the key things you should know about car insurance deductible.
It is compulsory for every vehicle owners in India to purchase insurance for the vehicles. Most of the car insurance policies require to be renewed on a yearly basis. Paying for the insurance premium will become a regular expense for car owners. Knowing ways to reduce the expense of car insurance is a good way to save money. One of the ways to do that is to know how the insurance deductible works and turns it into your favour.
Knowing how car insurance deductible work can be very beneficial
What is insurance deductible?
When your car is insured by an insurance company, the company will offer cover for the expense that you have to pay in case of unfortunate incidents that are included in the policy. However, the company might not cover the total expense, instead, they might offer to pay you a portion. The policyholder can choose to pay for the rest. The amount of money the policyholder is willing to pay is called deductibles.
There are two types of deductibles: compulsory or voluntary.
For the compulsory deductible, the car insurance buyers will have to pay the pre-determined amount of money for the total loss. The compulsory deductible is fixed by the insurance provider. When the claim is filed, the amount you will have to cover is low.
Along with the compulsory deductibles, with voluntary insurance, policy buyers can choose to decide the deductible that they are willing to pay in case of any insurance claim made, apart from the compulsory deductible. However, in the case of voluntary deductibles, it is a trade-off. If you opt for voluntary deductibles, you will receive discounts on your premium. The higher the deductible is, the lower the premium you have to pay.
Policyholders can choose between compulsory and voluntary deductible
Why do insurers require deductible?
Deductibles are included only in the Comprehensive coverage policy which is an optional policy alongside the compulsory Third-party Liability Only policy. Deductibles are provided as a way to lower the number of claims. By requiring the policyholder to pay for the portion of the cost, the insurer believes it will dishearten the policyholder from making small claims. The requirement of deductible will make the driver more cautious when driving and avoids making claims.
If you want to get the cover from the insurer for a claim, you will have to pay the deductible first. Avoiding paying car insurance deductible is impossible if you have signed for paying a compulsory and voluntary deductible. What if you don’t have the money in hand to pay? The only way to temporarily suspense making claims. If your car is still functioning and there is no damage to the mechanic parts, you can wait until saving enough to pay the deductibles.