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Motor Blog
11 Sep 2024
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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.
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 Deductible Amount | Discount Rate | Details |
---|---|---|
Rs. 1,000 | 5% | Standard discount applied for the compulsory deductible. |
Rs. 2,000 | 10% | Increased discount with a higher compulsory deductible. |
A deductible in bike insurance refers to the amount the policyholder must pay out-of-pocket before the insurance coverage kicks in for a claim. It is a fixed amount or percentage agreed upon at the time of purchasing the policy. For example, if the deductible is ?5,000 and the repair cost is ?10,000, the policyholder would need to pay ?5,000, and the insurer would cover the remaining ?5,000. The deductible helps reduce the insurance premium, as a higher deductible typically leads to a lower premium. It also discourages small or minor claims, ensuring the insurer handles significant damages.
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.
Voluntary Deductible Amount | Discount Rate | Maximum Discount |
---|---|---|
Rs. 2,500 | 20% | Rs. 750 |
Rs. 5,000 | 25% | Rs. 1,500 |
Rs. 7,500 | 30% | Rs. 2,000 |
Rs. 15,000 | 35% | Rs. 2,500 |
Aspect | Compulsory Deductible | Voluntary Deductible |
---|---|---|
Definition | A mandatory amount set by the insurer that the rider must pay in case of a claim. | An optional amount chosen by the rider to reduce the insurance premium. |
Amount | Fixed by the insurer and non-negotiable. | Chosen by the policyholder, usually higher than the compulsory amount. |
Impact on Premium | Does not affect the premium directly. | Choosing a higher voluntary deductible results in a lower premium. |
Applicability | Applies to all claims under the policy. | Applies only if the policyholder opts for it. |
Adjustability | Cannot be changed by the policyholder. | Can be adjusted by the policyholder at the time of policy renewal. |
Purpose | Ensures the insurer does not bear the full cost of minor claims. | Helps reduce premium costs for the rider. |
Flexibility | No flexibility, as it is predefined by the insurer. | Flexible, depending on the rider's preference. |
If you don’t make any claims during the policy period, your no-claim bonus (NCB) may increase, which can reduce your premium for the next policy renewal. It rewards claim-free years with lower premiums.
Typically, once the deductible amount is selected, it cannot be changed mid-policy. You can modify it during the policy renewal, where you can choose a higher or lower deductible as per your preference.
Deductibles are the amount you pay out of pocket when making a claim. The higher the deductible, the lower your premium, but you’ll pay more in the event of a claim. It affects the payout you receive from your insurance provider.
Yes, both compulsory and voluntary deductibles are applied together during a claim. The compulsory deductible is fixed by the insurer, while the voluntary deductible is chosen by you, usually to lower the premium. * 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.
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