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Voluntary Deductible in Car Insurance

What is a deductible?

What are the types of deductibles?

There are two main types of deductibles, one that is set by the insurance company and is compulsory, and one that you can set for yourself voluntarily.  

Compulsory Deductible

Voluntary Deductible

What is it?

The compulsory deductible is set by an insurance company during the time of policy purchase. In this kind of deductible, you (as the policyholder) have no choice but to pay a fixed amount as part of the motor insurance claim.

A voluntary deductible is chosen by you yourself. Basically, you agree to pay an extra amount (in addition to the compulsory deductible) that would normally have been paid by the insurer out of your pocket. So, when you add this voluntary deducible to your insurance cover, it brings down your car insurance premium as the risk on the insurer’s side reduces. 😊

Will it affect your premium?

This compulsory deductible doesn’t have any impact on your car insurance premium, and it is only applicable for comprehensive car insurance, and not to third-party liability only policies.

Generally, a higher voluntary deductible means a lower premium amount. But it also means that you will have to pay more yourself in case of any damage to your car (and this can impact on your other expenses) so do remember to consider this.

How much will you pay?

According to IRDAI regulations, the amount of this compulsory deductible in car insurance is based on the cubic capacity of your car engine. Right now, it is set as follows in table #1

See how your voluntary deductible helps to reduce your car insurance premium in table #2

Compulsory Deductible in Car Insurance

Engine Capacity

Compulsory Deductible

Up to 1,500 cc


Above 1,500 cc


Voluntary Deductibles in Car Insurance

Voluntary Deductible



20% on the Own Damage premium of the vehicle, subject to a maximum of ₹750


25% on the Own Damage premium of the vehicle, subject to a maximum of ₹1,500


30% on the Own Damage premium of the vehicle, subject to a maximum of ₹2,000


35% on the Own Damage premium of the vehicle, subject to a maximum of ₹2,500

The discount mentioned above is just an example. Please check with the Insurance company before opting for any voluntary deductible.

Why would you want a higher voluntary deductible?

When does a voluntary deductible NOT make sense?

How would you be affected?