Free quotes from 20+ insurers with lowest premiums in 30 seconds
*Please note that the quotes shown will be from our partners

Is Voluntary Deductible from Your Car Insurance Policy Worth it?

After you buy a car, the next thing you have to buy is insurance. It is a compulsion for everyone in India to buy motor insurance. When people buy four-wheeler insurance for their cars, they get the option of voluntary deductible that is very tempting to go for. Initially, it attracts insurance buyers to save on the premium. So, many insurance buyers avail this option too.

Is it good or it is bad? Let’s figure out.

Kinds of a Deductible in Car Insurance

First and foremost, let’s understand what voluntary deductible is. Deductibles are part of the total claim that an automobile owner is supposed to bear before the insurance provider pays his share. A four-wheeler insurance policy typically includes two kinds of such a deductible. First one is Compulsory Deductible and the second one is Voluntary Deductible.

Compulsory Deductible

According to the Insurance Regulatory and Development Authority (IRDA) guidelines, a compulsory deductible entirely depends upon the engine potential of the four-wheeler.

The rates are set for the private four-wheelers according to the Indian Motor Vehicle Act. If the engine potential is more than 1500 cc, the compulsory deduction is Rs. 2000; if it is less than 1500 cc, the compulsory deduction is Rs. 1000 only.

Voluntary Deductible

A voluntary deductible is the particular share of the claim that the vehicle owner will agree to pay voluntarily from his own pocket. If a person goes for the voluntary deductible, the premium drastically decreased. If one goes for high the voluntary deductible, then the car insurance premium will be synced accordingly.

In order to clearly understand the relationship between voluntary deductible and payable insurance premium, refer the following table:

Amount of Voluntary Deductible

Discount Percentage on the Premium

Rs. 2,500

20% on the own damage premium, subjected to a maximum amount of Rs. 750

Rs. 5,000

25% on the own damage premium, subjected to a maximum amount of Rs. 1,500

Rs. 7,500

30% on the own damage premium, subjected to a maximum amount of Rs. 2,000

Rs. 15,000

35% on the own damage premium, subjected to a maximum amount of Rs. 2,500

Some charges, including the cost of fiber and plastic parts, go beyond the coverage as per compulsory deductible and voluntary deductible. By default, the automobile owner is supposed to pay such charges from his own pocket.

For instance, a person has a car of 1000 cc engine capacity and he has selected voluntary deductible of Rs. 5000. He met with a minor accident. The repair charges are Rs. 15,000. In such scenario, the insurance company is bound to make the payment to the vehicle owner by the following calculations.

Total claim amount (A)


Consumable parts and components deduction (B)

Rs. 3,000

Compulsory deductible Amount (C)

Rs. 1,000

Voluntary deductible Amount (D)


Total payable claim amount

A – (B+C+D)

Rs. 7,000


Since the vehicle owner has opted for the voluntary deductible, out of the total claim amount of Rs. 15,000, the insurance provider (as you can see) is liable to pay the amount of Rs. 7,000 only.

More than half of the cost falls on the shoulders of the vehicle owner. The basic goal of buying car insurance in the first place is not met.

You may like to Read: Third Party Liability Insurance

Wrapping it up

If you avail the voluntary deductible option, you might have to face the consequence(s) in the future. It adversely affects the claim settlement later on. It is better to resist the temptation of going for the voluntary deductible, as it turns out to be beneficial in the future.

You May Also Like
  • 5 Best Car Insurance Companies in India

    Getting a Motor Insurance is essential for all the car/vehicle owners, drivers in India. It is mandatory to have a third-party car insurance under Indian Motor Act. But it is recommended to get comprehensive insurance fo...

    read more
  • Zero Depreciation Car Insurance Coverage & Features

    English Hindi   Mr. Kamal Shah got furious as he had to spend Rs 30,000 from his pocket towards repairing of the car. The comprehensive car insurance, which he bought last year, only reimbursed Rs 70,000 after fa...

    read more
  • Insured Declared Value (IDV)

    Insured Declared Value is the maximum Sum Assured fixed by the insurer which is provided on theft or total loss of vehicle. Basically, IDV is the current market value of the vehicle. If the vehicle suffers total loss, ID...

    read more
  • 9 Secrets That Your Motor Insurance Provider Won’t Tell You

    Due to the dangerous driving conditions, it is compulsory to have third party insurance for every vehicle plying on Indian roads. It ensures the overall safety of the people involved in a road mishap. As we all know, it...

    read more
  • No Claim Bonus (NCB) in Car Insurance

    No Claim Bonus (NCB) is a reward, given by an insurer to a policyholder for making no claims during the policy term. NCB can be accumulated as a discount on the premiums over years. NCB discount ranges from 20% to 50% on...

    read more