Voluntary Deductibles Decoded: Save Smart on Car Insurance Without Taking a Wrong Turn
Brokerage Free Team •May 17, 2025 | 4 min read • 961 views
Brokerage Free Team •May 17, 2025 | 4 min read • 961 views
When purchasing car insurance, we often look at the premium, coverage, and add-ons—but one key feature that can directly affect both your premium and claims payout is the deductible.
Among the types of deductibles, the voluntary deductible can be a strategic tool to reduce your premium—but it also comes with a trade-off.
In this blog, we explore five key facts about voluntary deductible in car insurance, explain how it works, and help you decide whether it's the right choice for you.
A deductible is the portion of the repair or claim amount that you—the policyholder—agree to pay out of your own pocket before the insurer covers the rest.
There are two types:
Compulsory Deductible: A fixed amount set by the insurance regulator (IRDAI in India) that every policyholder must pay. It’s non-negotiable.
Voluntary Deductible: An optional amount you choose to pay in addition to the compulsory deductible, in exchange for a discount on your premium.
Feature | Compulsory Deductible | Voluntary Deductible |
Mandatory? | Yes | No |
Who sets the amount? | Regulator (IRDAI) | You (as per insurer’s options) |
Purpose | Ensures basic claim sharing | Lowers premium via risk sharing |
Affects premium? | No | Yes – can reduce it significantly |
Adjustable by policyholder? | No | Yes |
Example:
If your total repair bill is ₹15,000, and:
Compulsory Deductible = ₹2,000
Voluntary Deductible = ₹3,000
You will pay ₹5,000, and your insurer will cover ₹10,000.
When you agree to a higher voluntary deductible, you're committing to cover a larger portion of any future claims. In return, insurers offer a discount on the own-damage portion of your premium.
Voluntary Deductible Chosen | Premium Discount Offered |
₹2,500 | Up to 20% |
₹5,000 | Up to 25% |
₹7,500 | Up to 30% |
₹15,000 | Up to 35% |
💡 Analogy:
Think of a voluntary deductible like a co-pay in health insurance. The more you agree to pay during treatment, the less you pay as a monthly premium.
Voluntary deductible can be a smart choice for policyholders who are confident they won’t need to file a claim frequently.
Drivers with a clean driving record
Individuals who use their car occasionally or only for short distances
Owners of budget-friendly or older cars with lower repair costs
People with access to affordable local garages
If you fall in any of these categories, you could enjoy lower premiums without much risk of paying the deductible often.
While the premium savings may look attractive, a voluntary deductible can become a financial burden if you raise frequent claims or your repair costs are minor.
New or inexperienced drivers
Cars driven daily in congested or accident-prone areas
High-end vehicles where even small repairs are costly
Individuals who’ve raised multiple claims in recent years
Example:
If your total deductible (compulsory + voluntary) is ₹7,000 and the repair bill is ₹8,000, you receive only ₹1,000 from the insurer—which may not justify the hassle of making a claim.
The voluntary deductible amount you select should reflect a balance between premium savings and your ability to afford unexpected repairs.
Your claim history: Fewer past claims = more benefit from higher deductible
Car age: Older cars may not justify higher deductibles due to depreciation
Driving conditions: City drivers face higher risks than occasional rural drivers
Financial comfort: Can you easily cover ₹5,000–₹15,000 during an emergency?
✨ Pro Tip: Don’t blindly choose the highest deductible just for a bigger discount. Always ensure the risk-reward trade-off is acceptable for your situation.
A voluntary deductible is a smart way to reduce your car insurance premium—especially if you are a careful driver with a low likelihood of making claims. But it isn’t for everyone.
If you can confidently manage minor repair costs on your own and have a reliable driving record, it can lead to meaningful savings. However, if your circumstances involve higher risk, expensive repairs, or frequent driving, it’s safer to go with a lower deductible.
Still unsure whether a voluntary deductible is right for you?
✅ Use an online deductible calculator or
✅ Talk to a certified insurance advisor to assess your ideal risk-to-savings ratio.
Have a question? Drop it in the comments below and we’ll help you decode the best car insurance strategy for your needs!
1 year ago | 17 min read • 27449 views
1 year ago | 3 min read • 14310 views
1 year ago | 2 min read • 13605 views
1 year ago | 10 min read • 13348 views
1 day ago | 5 min read • 109 views
2 days ago | 4 min read • 62 views
5 days ago | 5 min read • 251 views
6 days ago | 4 min read • 364 views