Deductables on Claim Amount

Insurance does not mean that you get reimbursed the entire amount of loss you have suffered in the event of a claim. There are certain   conditions in the policy that limit the amount you are entitled to claim. In the Insurance parlance these are known as “excess/deductable" & “co-pay”, etc. 

Excess/Deductable : Excess is the amount you will have to bear yourselves in case of a claim. That is, you will only get the claim amount that exceeds the amount of excess stipulated in the policy.  In other words, your claim will only be considered if the amount claimed by you is in excess of a stipulated amount and  even then you are paid only the amount in excess of the stipulated limit. For example, your motor policies  have an deductable of Rs. 100/- in two wheeler and Rs. 1000/- in private vehicle. excess/deductables along with the loss of bonus which one would loose in case you claim would deterent to small claim and in turn help the insurance companies avoid frequent claims of smaller amounts in turn reduce cost of operation.lower the operational cost of an insurance company, lower would be the premium.

Co-pay : Usually found in health insurance polices, condition of co-pay or co-payment is the amount that the insured will have to share in case of each and every claim. These are used by the insurance companies to control their claims outgo  in case of big losses. Condition of  Co-Pay is generally incorporated in Senior Citizens’ Health Insurance Policy, Critical Illness Policy, etc.

Both excess/deductable and copay can be used in your advantage if you decide to take voluntary excess/deductable or copay, that is, if you are ready to meet the expenses of smaller claims; premium can be reduced. Conditions of Excess/deductable and co-pay are there in many classes of insurance policies.   Better get acquainted with the policy conditions or get in touch with your insurance broker.