Why there is compulsory deductible in insurance policies?

Why Deductibles? Deductibles are provided only in Comprehensive Coverage policies with a view to lower the incidence of claims. Compulsory deductibles discourage policyholders to raise smaller claims because they know that a part of it will have to be met by them.

1. Why are deductibles required?
2. What is compulsory deductible insurance?
3. What is the purpose of deductible clause in insurance policy?
4. What is generally true about deductibles in insurance policies?

Why are deductibles required?

Deductibles cushion against financial stress caused by catastrophic loss or an accumulation of small losses all at once for an insurer. In addition to premiums, individuals must meet health insurance deductibles and may also be required for other costs like copays and coinsurance, depending on their plans.

What is compulsory deductible insurance?

Compulsory deductibles is one where the insured has no choice but to has pay one part of the claim. As per IRDAI regulations, the compulsory deductible is INR 1000 if the Car is not exceeding 1500 Cubic Capacity and INR 2000 if the Car has Cubic Capacity greater than 1500.

What is the purpose of deductible clause in insurance policy?

a clause in an insurance policy stipulating that the insured will be liable for a specified initial amount of each loss, injury, etc., and that the insurance company will be liable for any additional costs up to the insured amount.

What is generally true about deductibles in insurance policies?

The amount you pay for covered health care services before your insurance plan starts to pay. With a $2,000 deductible, for example, you pay the first $2,000 of covered services yourself. After you pay your deductible, you usually pay only a copayment or coinsurance for covered services.