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Voluntary Deductibles and Compulsory Excesses

Voluntary deductible is the portion of a claim that the customer is willing to bear voluntarily. Compulsory excess is the sum added to the customer's premium as a result of bad claims experience with regards to a vehicle. It is tagged on apart from the Ma

Apnainsurance.com Research Bureau

28 Nov 2007

A deductible is the portion of your car insurance claim that is not covered under your policy.

A Voluntary Deductible is an undertaking by the vehicle owner to bear a certain amount of loss in each insurance claim. For instance, you had an accident and your claim amount is Rs. 10000. You choose to bear the first Rs. 5000 of your claim. This becomes your voluntary deductible. The claim will now be worth only Rs. 5000. If you opt for a voluntary deductible, the insurer offers you a discount on your vehicle premium.

Click here to view the Voluntary Deductibles for different types of vehicles.

A Compulsory Excess, on the other hand, is added to a premium by the insurer. This excess is in addition to Malus. Compulsory Excesses are added to cover for a history of bad claims experience for a particular vehicle. When a compulsory excess is levied, no premium discounts are allowed.

See also:

What is Malus?

What is No Claim Bonus?

What if I forget to renew my auto insurance on time?

Can I renew my auto insurance with another insurance company?

Motor Insurance FAQs on Claims

Motor Insurance FAQs on Coverage

Motor Insurance FAQs on Cost, Premiums, Bonus, Discounts, Renewals