Policy deductible is a very important factor of your auto insurance policy. It is a clause that requires a lot of attention otherwise you will complain later about being left in the dark by your auto insurance company. As the term hints at, policy deductible is an amount that you are supposed to pay for any claim. Policy deductible is usually capped or limited by a percentage or amount of any claim. For instance, if your policy deductible in 10% then you are supposed to pay 10% of each claim you submit to the insurance company and rest will be paid by the Insurance company.
There are two types of policy deductibles;
1. Compulsory deductible
2. Voluntary deductible
Compulsory policy deductible is the amount that you have to pay no matter what. You don’t get any choice in that. Your insurance company must have a set pattern to decide the compulsory deductible. Regardless to say, each auto insurance provider has different percentages of the compulsory deductible.
The voluntary deductible has some power in your hand. You can decide it. The percentage is usually 5 to 10 percent. By volunteering for a higher amount of deductible, you may be able to negotiate lower annual premium for your auto insurance policy. It is asked by Insurance company to individual customers when they are buying policy from the Insurance company to confirm the percentage they are willing to contribute in case of any claims.