What are the current deductibles in car insurance you must know about
What are the current deductibles in car insurance you must know about 30th June 2022
Whether a two-wheeler or a four-wheeler, owning a vehicle is a matter of pride and sheer joy. When choosing your vehicle, the engine capacity, mileage, pickup, and colour are some of the few factors you consider. One lesser talked about or thought about aspect is your motor insurance. Choosing the best motor insurance company in India should be your next priority after finalising the car because your dearest asset needs a reliable safety shield.
There are various hidden conditions and additional costs associated with insurance. It may be in the form of add-ons or premiums, but more often than not, we are confused about the final payments and all the benefits of getting motor insurance.
In today's article, we will talk about deductibles in car insurance and all you need to know about it.What are deductibles?
An amount you are liable to pay from the total claim amount is known as deductibles in car insurance. Typically, if the repair costs you twenty thousand and the deductible is two thousand, you will have to pay two thousand, and the insurer pays the remaining eighteen thousand.
The higher the deductible amount, the lower your overall premium amount will be. Although promising a higher deductible would mean you will have to spend money from your pocket. Hence, analysing your monetary situation and the ability to pay the deductible is crucial to understanding the amount you might have to pay in case of accidents or damages.Types of deductibles.
There are two types of deductibles from which you can opt from:
1. Voluntary deductible set by yourself
2. Compulsory deductible levied by the insurer
What is a voluntary deductible?
The amount you decide to pay from your pockets, depending upon the total insurance amount, is a voluntary deductible. As the risk that the insurer will take is lower, voluntary deductibles are a great way to get your premium lowered. Opting for a higher deductible will bring down the value of your insurance premium amount.
Before finalising your policy paper, deciding on a deductible amount you will pay yourself in case of any damages is imperative. This deductible is applied to every claim made after activation of the insurance.What are compulsory deductibles?
The policyholder is not the one making decisions on these deductibles. The insurance board of India has set a value based on the engine's power or CC in these vehicles. It can vary from anywhere between one thousand to two thousand rupees. The premium amount stays unaffected irrespective of the compulsory deductibles.
When buying car insurance, two costs primarily add up. The first is the premium amount you have to pay at the beginning of the policy renewal, and the second is the compulsory deductibles you pay for every claim as a deductible.Why is it essential to levy deductibles?
Many people partake in fraudulent activities to skip maintenance costs and reap maximum benefits from insurance companies. Manipulating evidence or staging accidents are part of moral hazards. Such situations can be avoided if a deductible is charged per claim.
Another reason insurance companies practice using deductibles is to provide a buffer between actual accidents and minor damages. Insurance providers offer financial support to people when they claim an accident or theft. However, the compulsory deductibles provide a cushion against unnecessary claims and financial stress for an insurer. Deductibles are used to protect them from such overwhelming situations.
These points are sure to help you understand deductibles and insurance policies better. Do thorough research before you buy your insurance policy. Choose the best motor insurance company in India and add value to your prized possession. Time invested in buying reliable insurance will bring you the best returns during tough times.
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Disclaimer: The information provided above is for illustrative purposes only. To get more details, please refer to policy wordings and prospectus before purchasing a policy.