Car insurance is something that enables the policyholder to feel less burdened about a probable emergency or damages that may be incurred on their car, life or both. But at the same time, car insurance companies also tend to permit the policyholders to share, rather hold a part of the risk that is involved with the car insurance policy in the form of a deductible. In layman’s words, a deductible is simply the predefined sum of money that would be paid by the policyholder while meeting the claim settlement. A deductible comes into the play when a potent claim arises; at such a moment, the policyholder has to pay the said amount from their pocket while the remaining balance would be paid by the car insurance company.
Deductibles are deemed to be an integral part of a car insurance plan and tend to have a major impact on a policyholder’s claim settlement and insurance premium. One can understand more about deductibles and its related concepts by taking a look at its two major components, namely, the Compulsory Deductible that is an indispensable part of a car insurance policy and Voluntary Deductible which is paid willingly by the policyholders.
Today, we will be discussing Voluntary Deductible and find out how it has a significant impact on a policyholder’s car insurance premium.
What is a voluntary deductible?
The very first question that one would normally ask is what exactly is a voluntary deductible? To put it out there in simpler words, it is just the amount that a policyholder is willing to pay straight from their pocket to fulfil a part of their car insurance claim. The willingness of the policyholder makes this type of deductible voluntary in nature.
How does Voluntary Deductible help to reduce your premium?
The voluntary deductible tends to have a direct impact on the car insurance premium of a policyholder and can turn a relatively pricey policy into a cheap car insurance policy. The willingness to pay a higher amount as voluntary deductible automatically lowers the amount paid as their car insurance premium. The voluntary deductible is directly applied to the part defined as ‘own damage’ in terms of a policyholder’s car insurance premium. Just like Compulsory Deductible, the Voluntary Deductible is also deducted from a policyholder’s final claim amount. Such deductibles are to be applied to each claim made by a car insurance policyholder. The decision to either opts for the Voluntary Deductible or not depends entirely on a policyholder and their level of confidence as a driver. A policyholder who wants to opt for minimum risk can always omit the option of voluntary deductible and pay only the predefined premium set for their chosen car insurance policy.
On an entirely different note, a voluntary deductible makes a policyholder somewhat more careful about their behaviour behind the wheels. A policyholder who is confident about their driving skills should opt for the Voluntary Deductible and enjoy cheap car insurance without compromising with the quality of coverage.
Make sure to learn more about each type of car insurance deductibles, to avail the best bargain when it comes to insurance coverage. Don’t base your decision only because of cheap car insurance premium, pay close attention to car insurance prices, their benefits and coverage too.