What is Compulsory and Voluntary Deductible in Bike Insurance?

Buying a bike insurance policy requires you to consider not one, but multiple factors together. Your bike’s age, engine capacity, and any accessories that are fitted are some of the factors which impact the premium. A deductible is one critical component that impacts your premium significantly. Thus, it is essential to know thoroughly how it impacts bike insurance prices. This article explains the different types of deductibles that can be seen when buying bike insurance online.

To start with, what are deductibles?

A deductible is the component that you, the policyholder, are required to pay before the insurance company compensates for the loss. Although a comprehensive insurance policy covers most of the expenses, deductibles are out-of-pocket expenses that must be paid at the time of a claim. As per regulations, all bike insurance policies have a deductible component in their policy terms.

Compulsory and Voluntary deductible-Explained

Deductibles are classified into two broad categories— compulsory deductible and voluntary deductible. As the name suggests, a compulsory deductible is mandatory in nature and included in the policy terms for all insurance plans. Hence, it is also called the standard deductible. This amount of compulsory deductible is fixed for every insurance policy and must be paid for before the insurance company pays for the balance cost of repairs. For two-wheelers, the compulsory deductible is set at ₹100 for every insurance claim. Example: Mr Suresh purchases a bike policy and meets with an accident where the total cost of damages is ₹5,000. Since the compulsory deductible is set at ₹100, Mr Suresh will be required to pay this amount, after which the insurance company will compensate for the balance repair costs. Contrary to compulsory deductibles, voluntary deductibles are optional in nature and can be opted for over and above the standard deductible. Unlike the compulsory deductible, which is determined by the IRDAI, voluntary deductibles are available to choose from within a specified range. Thus, you as a policyholder, agree to pay for a higher out-of-pocket expense during each claim. This consequently makes the insurance policy more affordable. Thus, the higher the deductible, the higher are the out-of-pocket expenses. You can visit the official website of IRDAI for further details. Unlike voluntary deductibles where the premium goes on decreasing, a compulsory deductible does not impact the bike insurance price. The table below mentions the concession that is offered based on the amount of voluntary deductible in your policy. * Standard T&C Apply

Amount of Voluntary deductible	Markdown in premium amount
₹2,500	20% with a capping of up to ₹750
₹5,000	25% with a capping of up to ₹1,500
₹7,500	30% with a capping of up to ₹2,000
₹15,000	35% with a capping of up to ₹2,500

  * Standard T&C Apply Now that you know how compulsory and voluntary deductibles can be used in your two-wheeler insurance plans, here are some tips to remember:

• Deductibles are not the same as copay, where you and the insurance company share the expenses of insurance claim in pre-defined percentages.
• Even if you opt for a voluntary deductible, you will still be required to pay for the compulsory deductible during the settlement process.
• You only need to pay the deductibles amount when a claim is approved and not before that.

* Standard T&C Apply Insurance is the subject matter of solicitation. For more details on benefits, exclusions, limitations, terms and conditions, please read sales brochure/policy wording carefully before concluding a sale.