According to Tapan Singhel, MD and CEO, Bajaj Allianz, General Insurance, deductibles should be subjective to the usage of your car and the risks you perceive your car might be exposed to. In motor insurance, there is a component of mandatory deductible of Rs.1,000, which is an amount a motor policyholder has to bear in case of a claim. However, you also have the option of taking a higher deductible, termed as voluntary deductible that will lead to a saving in the premium that you pay. For instance, if the usage of your car is less and you feel that the risks that your vehicle is exposed to are low and, in case of any damage to the car you feel that you could afford a claim of up to Rs.5,000, then ideally you could look at the option of voluntary deductible.
Moreover, you should also analyse the cost vis-à-vis the savings involved for a couple of years and then opt for a higher deductible. It is a personal choice depending on the risk that you perceive for your vehicle, the financial affordability in case of a claim and, most importantly, how much you save on the premium by going for a higher deductible. Take a decision depending on these factors.
If you opt for a higher deductible over and above the compulsory deductible, you have options available to choose from and avail discounts. Please note that higher the deductible you opt for, the higher is the discount you can avail on the premium.