What Is Voluntary Deductible In Bike Insurance?

Getting an insurance plan for your motorcycle is compulsory in India by law. However, many people can’t afford to pay the premium costs for their bike’s insurance every year. Hence, they try to find different strategies and methods that can help them to lower the premium costs for their insurance plans.   Policy clauses such as compulsory and voluntary deductible help them get valid insurance for their bike at low premium costs and stay inside the lines of traffic laws. A voluntary deductible can be an effective tool in decreasing the premium costs of your general insurance plan. Before going ahead into the topic, let us first understand, what is voluntary deductible in bike insurance?

What Does Deductible in Insurance Policy Mean?

A bike insurance deductible is the amount of money paid by the bike’s owner for repairs needed along with the claimed insurance amount. Deductibles in bike insurance can be understood as a contribution made by the holder of the policy during the settlement of a claim in case of an accident.   Though insurance companies pay for a major part of the claimed amount, a specified percentage of the amount needs to be paid by the policyholder. Further, the deductible can be categorised into two parts: Compulsory and Voluntary Deductibles.   Compulsory Deductibles Insurance Regulatory and Development Authority (IRDA) guidelines enforce a predefined amount that needs to be paid by the owner of the policy at the time of a claim settlement. The amount set by the IRDA as a compulsory deductible for two-wheelers is Rs 100.   Voluntary Deductibles Voluntary deductible is the specified share of the claim amount that the policyholder agrees to pay voluntarily in occurrence of an accident. The amount can be set by the policyholder based on his affordability and risk and is mentioned in the insurance policy. More the amount set by the policy owner, lesser is the premium cost for the insurance plan.   Study the given table to comprehend how the discount percentage on premiums in case of voluntary deductible works.    

Voluntary Deductible Amount	Discount on Premium
Rs 2500	20% coverage on own damage premium with a maximum discount of Rs 750.
Rs 5000	25% coverage on own damage premium with a maximum discount of Rs 1500.
Rs 7500	30% coverage on own damage premium with a maximum discount of Rs 2000.
Rs 15000	35% coverage on own damage premium with a maximum discount of of Rs 2500.

Example of Voluntary Deductible in a Bike Insurance Plan

Let us assume Mr Sharma bought a two wheeler insurance online from Bajaj Allianz general insurance and opted for a voluntary deductible of Rs 5000. If the cost of his insurance policy was Rs 5000, he would get a discount of 25% amounting to Rs 1250. This means he will get the policy for Rs 3750 with a discount of Rs 1250.   Unfortunately, after a few days, his bike met with an accident and had damages worth Rs 10000. Now he can claim the cost of damages from his insurance company. However, he will have to pay Rs 100 as compulsory deductible and Rs 5000 as voluntary deductible. The remaining amount of Rs 4900 will be paid by the insurance company.

What are the Common Misconceptions About Voluntary Deductible in Bike Insurance?

There are various misconceptions about voluntary deductible in bike insurance that people have. Let us clear that up for you. Some of the misconceptions are as follows:

●      You need to pay the voluntary deductible amount while paying for premium.

Many people think they have to pay the voluntary deductible amount while paying for the insurance premium. This is not true. You will only be paying the voluntary deductible in case you make any claims with the insurance. If no claim is made, you will still get the discount on the premium, and no extra amount has to be paid.

●      It is always better to opt for the highest deductible amount.

You can get a high discount if you agree to pay for a higher deductible amount voluntarily. However, the risk also multiplies. If no claim is made, it can be profitable for you. But in case you meet with an accident and have to pay for damages, the cost of claims will be overwhelming for you putting you in a much worse condition.

●      Compulsory and voluntary deductibles are the same.

As we explained earlier, compulsory and voluntary deductibles are two different aspects of an insurance plan. Where compulsory deductibles are mandatory in case of a claim, taking a voluntary deductible is completely the choice of the policyholder.

Frequently Asked Questions

1. Can I opt for a voluntary deductible if I buy a two wheeler insurance online?

Yes, you can opt for voluntary deductible whether you buy your two wheeler insurance policy online or offline.  

2. Do I have to pay for a compulsory deductible if I already have a voluntary deductible clause in my insurance policy?

A compulsory deductible is the mandatory claimant fees set by the IRDA. It has to be paid whether you have opted for voluntary deductible or not.

Conclusion

The information in this article must have clarified what is voluntary deductible in bike insurance? So if you ride with great attention and have no history of accidents and bike damages, you can opt for the voluntary deductible in your insurance plan. On the contrary, if you like to take your risks and are a rash driver, it is advised not to go for this plan as you may end up losing more money opting this plan.