What is Voluntary Deductible in Car Insurance?

What is Voluntary Deductible Add-On Cover in Car Insurance?

A voluntary deductible in car insurance is a fixed amount that you choose to pay from your own pocket when making a claim. As defined by the name “voluntary,” payment of this deductible is totally up to you. It is your choice and not something the insurer forces you to accept.

How Does Voluntary Deductible Work?

Let’s say your car repair bill comes to ?5,000, and you have chosen a voluntary deductible of ?2,000. This means you will pay ?2,000 yourself, and the insurance company will cover the remaining ?3,000, as per the policy terms.

Since you agreed to pay a higher voluntary deductible, you have to pay a lower insurance premium compared to someone who did not choose one. It is a way of saving on premiums if you are confident about handling small repair costs.

What is the Voluntary Deductible's Effect on Premium?

When you choose a voluntary deductible in car insurance, you agree to pay part of the repair cost from your own pocket. This reduces the payment amount made by the insurance company, so they give you a discount on your premium. But remember, this option is only available with comprehensive car insurance, not with third-party insurance.

The table below shows how much money you can save on your motor insurance premium by choosing a voluntary deductible:

Step-By-Step Guide for Voluntary Deductible in Car Insurance

To know about the step-by-step guide for the voluntary deductible add-on, go through the following points:

• Express Your Choice Inform the insurer that you want to choose a voluntary deductible while buying or renewing your car insurance.
• Decide the Deductible Amount Discuss and finalize the voluntary deductible amount with your insurance provider.
• Premium Calculation The insurer calculates your premium based on the chosen voluntary deductible amount.
• Purchase the Policy Once everything is finalized, proceed to buy your insurance policy.
• Pay Deductible During Claim If you file a claim, you will pay the agreed voluntary deductible amount first. The insurer will cover the remaining cost.

Key Things to Know Before Opting for a Voluntary Deductible in Car Insurance

Here are some facts that you should know about Voluntary Deductible in Car Insurance:

• Pay After Claim You need to pay the voluntary deductible only if your car insurance claim is approved.
• Understand the Difference It is not the same as co-payment. A voluntary deductible is a fixed amount, while a co-payment is a percentage of the claim.
• Not Mandatory Choosing a voluntary deductible does not cost extra. It is an optional feature.
• Compulsory Deductible Still Applies You still have to pay the compulsory deductible, even if you opt for a voluntary one.
• Not Suitable for Frequent Claims It is useful if you rarely make claims, but not ideal if you drive in high-risk areas or make frequent claims.

Is a Voluntary Deductible Add-On Cover in Car Insurance Beneficial?

This question can be subjective for most of us. But before concluding, just go through the factors that may affect your decision.

Choosing a voluntary deductible lowers your car insurance premium but increases your out-of-pocket cost during claims. It is a smart option if you drive safely and claim rarely. However, if you drive in accident-prone areas or expect frequent claims, it is better to avoid them to prevent extra expenses.

Conclusion

A voluntary deductible helps you to save money on your car insurance premium, especially if you are a safe driver and rarely make claims. However, it also means that you need to pay a certain amount in case of an accident or damage. So, it is important to choose an affordable amount that you can pay without stress.

If planned wisely, this option can offer both financial relief and smarter coverage. So, take a moment to consider your needs and make a choice that keeps both your car and budget protected.

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