What Is the Significance of and Difference Between Compulsory and Voluntary Deductibles in Car Insurance?

There are many components that make up your car insurance policy, one among these is the deductible component.

The deductible is a part of the claim amount that you, the policyholder, promise to pay at the time of a claim. The insurance provider promises to pay the remaining amount, which is usually a higher percentage.

Take a look at this article to know more about deductible in car insurance and how they can affect your premium rates.

What are Deductibles in Motor Insurance?

As stated above, the deductible is a fixed sum of money that you have to pay out of your own pocket at the time of claim. There are two types of deductibles in comprehensive insurance. They are:

  1. Compulsory Deductible

This is a form of deductible that is fixed by the insurance provider. It depends on many factors such as the age of the car, the overall risk profile, etc.

However, some insurer’s fix it at Rs. 1000 for four wheelers. There is no relationship between compulsory deductible and the insurance premium rate.

  1. Voluntary Deductible

The voluntary deductible is decided by the policyholder. If you feel you have good driving skills and don’t need to make too many claims, you can opt for a higher deductible and get a lower premium.

The voluntary deductible directly affects the premium of the car insurance policy that you buy.

It is important to note here that the deductibles are not included in third-party car insurance online. It is only a part of comprehensive motor insurance.

How Does Compulsory Deductible Work in Comprehensive Insurance?

Let us now take a more detailed look at how compulsory deductibles work and how they affect car insurance premiums:

  • Fixed by the insurer: As stated above, the compulsory deductible is a fixed amount that you have to pay.
  • Does not impact premium: The compulsory deductible and car insurance plan’s premium have no connection. The premium will remain the same, irrespective of the compulsory deductible you pay.
  • Is assessed based on risk: The compulsory deductible is assessed as per the risk associated with the vehicle. For instance, if the vehicle is old and is more likely to cause car insurance claims, the insurance provider will ask you to pay a higher compulsory deductible. Also, if you are seen as someone who has made a high number of claims, you should be prepared to pay a higher deductible too.

This is a simplified version of how the compulsory deductible works in motor insurance. If you still have doubts, do speak to your insurance provider before you buy the plan.

How Does Voluntary Deductible Work in Comprehensive Insurance?

Now let us look at the voluntary deductible component:

  • Not fixed by the insurer: Unlike the compulsory deductible component, your insurance provider will not fix the voluntary deductible. You, as the policyholder, will have to do it and then honor it by paying the amount at the time of a claim.
  • Based on the driver’s skill: Most people choose voluntary deductible based on how good they feel their own driving skills are. If you feel you are a good driver and you won’t get involved in a car accident, thereby avoiding the need to make a claim, you can opt for a higher deductible and vice-versa.
  • Affects premium: The premium of a car insurance policy is dependent on the voluntary deductible. For a high deductible, the premium will be low and for a low deductible, the premium will be high.


Do remember that you will not get the deductible in third-party car insurance online. It is only present in comprehensive insurance.

Make sure the deductible is calculated properly and then your premium rates are finalized.

Get a good plan with a good cover and keep your vehicle protected at all times.

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