Understanding Bike Insurance Deductible

Every bike insurance policy comes with specific clauses. One of them is bike insurance deductible. In this article, you will get an insight into the nitty-gritty of deductible and how helpful they are in lowering the bike insurance premium.

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What is a Deductible in Bike Insurance?

bike insurance deductible is the portion of a claim the policyholder agrees to pay out-of-pocket expenses while settling claims with the insurance company. It's like a contribution from the bike owner for the cost of repairs or replacements in case of an accident or damage to your bike.

Although the insurance company pays a significant part of the claim payout amount, a policyholder has to pay a certain percentage as a deductible from their pocket.

Types of Bike Insurance Deductible in India

In India, bike insurance typically offers two types of deductible: compulsory and voluntary.

  1. Compulsory Deductible

    The IRDA (Insurance Regulatory & Development Authority of India) has determined the minimum amount of ₹ 100 as compulsory bike insurance deductible. As a bike owner, you must pay this mandatory deductible amount from your pocket.

  2. Voluntary Deductible

    Unlike compulsory deductible, voluntary deductible are optional. It allows you to choose a higher amount you will agree to pay in case of accidental damage.

    Remember, opting for a voluntary deductible can help reduce your bike insurance premium but increase your out-of-pocket expenses during a claim.

The following table shows how the discount percentage on insurance premiums works in the case of voluntary deductible:

Chosen Voluntary Deductible Amount Premium Discount
₹ 2,500 20% coverage on OD premium with a maximum discount of ₹ 750.
₹ 5,000 25% coverage on OD premium with a maximum discount of ₹ 1,500.
₹ 7,500 30% coverage on OD premium with a maximum discount of ₹ 2,000.
₹ 15,000 35% coverage on OD premium with a maximum discount of ₹ 2,500.

How Deductible Affect Your Bike Insurance Premium?

The deductible amount you choose directly impacts your bike insurance premium. A higher deductible means lower premium costs, while a lower deductible results in higher insurance premiums. Therefore, balancing your deductible and premium is essential to enjoy affordability without compromising insurance coverage.

Difference Between Compulsory Deductible and Voluntary Deductible in Bike Insurance

The below table highlights the difference between compulsory and voluntary deductible in bike insurance:

Points of Basis Compulsory Deductible in Bike Insurance Voluntary Deductible in Bike Insurance
Meaning It is the fixed amount that you have to pay, and the IRDA predetermines it. It is the amount that you have voluntarily chosen to pay over & above the compulsory deductible while settling the accidental claims.
Another Name Also known as compulsory excess. It cannot be changed or modified. Also known as voluntary excess. It is opted within a specified range.
Objective Helps prevent you from raising minor claims. Helps in availing discount on bike insurance premium amount.
Affordability Since IRDA determines it, the compulsory deductible is quite affordable. While voluntary deductible costs you higher, however in return, it reduces your bike insurance premium.

Factors to Consider When Choosing a Bike Insurance Deductible

Understanding bike insurance deductible helps in knowing the intricacy of insurance coverage. Whether you opt for a compulsory or voluntary deductible, it is essential to weigh the pros and cons based on your needs.

To help you with this, here are a few factors that you must consider when choosing a deductible:

  • Financial Situation: It is essential to assess your financial capability to cover the deductible amount in case of settling accidental claims. Henceforth, opt for the voluntary deductible in a bike insurance policy that you can comfortably afford without causing a hole in your pocket.
  • Frequency of Claims: Another essential pointer is to analyze your past claim history and assess the frequency of claims you can raise. If you rarely make claims, opting for a higher deductible can be cost-effective in the long run.
  • Bike Value: Consider your bike's value and the potential repair or replacement costs. A higher deductible may be feasible for older or lower-value bikes, while newer or high-value bikes may warrant a lower deductible for comprehensive coverage.

Myths About Voluntary Deductible in Bike Insurance

Let us debunk some of the common myths about voluntary deductible in bike insurance:

  • Myth: You have to pay the voluntary deductible when paying your bike insurance premium.
    Fact: You have to pay the voluntary deductible only when you raise any accidental claim. If you have raised no claim, you can still avail of a discount on the premium without paying any extra amount.
  • Myth: Always choose the highest deductible amount.
    Fact: It is understood that paying a higher voluntary deductible will give you a higher discount on your premium amount.
    However, it involves risks as well. If you meet with an accident, then at the claims settlement, the cost of claims might hurt your pocket if your bike is damaged in the worst condition.
  • Myth: Compulsory and voluntary deductible are both the same.
    Fact: There are two different components of a bike insurance policy. A compulsory deductible is mandatory in case of accidental claims. On the other hand, voluntary deductible entirely depends upon the policyholder.

Conclusion

When buying bike insurance online, consider its associated factors, including the bike insurance deductible that impacts your final premium amount. You can visit the official website of Policybazaar Insurance Brokers Private Limited for transparent policies, competitive premiums, and unparalleled customer support while choosing the right bike insurance deductible amount.

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Disclaimer: Policybazaar does not endorse, rate or recommend any particular insurer or insurance product offered by an insurer.

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*TP price for less than 75 CC two-wheelers. All savings are provided by insurers as per IRDAI-approved insurance plan. Standard T&C apply.

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#Savings are based on the comparison between the highest and the lowest premium for own damage cover (excluding add-on covers) provided by different insurance companies for the same vehicle with the same IDV and same NCB.

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