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What is Voluntary Deductible in Two Wheeler Insurance?

Written by Sharad Bajaj
Updated On Mar 26, 20212 min read

There are many features of two wheeler insurance which will impact your choices. Voluntary deductible is one such feature which reduces your premium amount. Let’s read all about it.

Deductibles refer to the claim amount that you would have to pay from your side at the time of claims. For example, if you raise a claim for any repair to your two wheeler, there would be a portion of the claim amount that would come out of your own pocket. Deductibles are of two types: these are compulsory deductibles and voluntary deductibles. By opting for the voluntary deductible, you would have to pay a higher amount from your side at the time of claims. Let’s read all about this feature and understand it better.

What Exactly is Voluntary Deductible?

Voluntary deductible is essentially an investment from your side, made towards the future repairs of your two-wheeler in advance. It is a portion of the claim amount that you would pay yourself, and the remainder would be paid for by the Bike insurance company as per the terms and limits of the policy, as normal.

How Does it Impact Your Insurance Premium?

As you may have guessed, it has an impact upon your bike insurance premium. It will save you some money at the outset. At the point of purchasing or renewing your insurance policy, you will surely see some benefit of voluntary deductible as it will result in a drop in the insurance premium cost of your two-wheeler insurance. Why is this? This is due to the fact that as you assure the insurance company that by opting for voluntary deductible, you would be taking care of some amount of the claim amount in future, it reduces the risk of financial liability for the insurance company and thus they would offer you a smaller premium. However, in the future when it comes to raising a claim, some amount of the total claim amount would come from your pocket.

Is it Advisable?

As you can see, it is not always advisable to opt for voluntary deductible. You may even say it is an unwarranted investment when it comes to your two wheeler. This is due to the fact that even though it leads to a smaller premium cost for your two wheeler insurance at the outset, in future you would be having to shoulder the additional financial liability of the claim amount that you have promised to pay. For this reason, since it adds to your own financial risk, it is not advisable. You may look at other methods with which to reduce your insurance premium.

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Therefore, voluntary deductible is an important feature of two-wheeler insurance to be aware of. It may seem appealing at first as it leads to a drop in your premium cost, but at the end of the day you may wish to avoid it due to the financial risk it imposes on you.

Disclaimer: This article is issued in the general public interest and meant for general information purposes only. Readers are advised not to rely on the contents of the article as conclusive in nature and should research further or consult an expert in this regard.

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Written by Sharad Bajaj
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 Sharad is an insurance industry veteran who has managed motor insurance products for over a decade. He helped set up and scale the motor insurance vertical for a leading insurance company in his previous stint. In his spare time, Sharad likes to read and be in tune with nature.

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