There are various factors that affect the cost of the car insurance premium. And unknowingly we end up paying an extra premium at the time of renewal. In some cases, the premium that the customers are charged might change in the following year.
In September 2018, last year, there were new rules that were introduced by the Insurance Regulatory and Development Authority (IRDAI) regarding the motor insurance cover in India. Under the purview of the new rules, it is now mandatory to buy long-term third-party insurance in India. It is applicable to both four-wheelers and two-wheelers. Third-party insurance is mandatory while comprehensive car insurance is recommended. The premium varies from one insurance company to another. It also varies at the time of renewal and there are various factors that affect the cost of the car insurance premium. But if you stay clear of a few basic things then you might end up paying a lesser premium.
Let’s have a look at some of the most helpful tips as listed below-
1. Buy Car Insurance Online
You can save premium by purchasing a car insurance policy online. If you know what you are buying and can understand the coverage and limitations then you would be in a better position to decide the type of plan you want to buy. Most of the insurance companies provide discounted plans online on their site.
Also, you should compare different car insurance plans online from top insurance companies in India. You can also use the car insurance calculator online to know how premium varies based on your car’s depreciation value, car value and also the geographical location. Compare the premium amount, policy features, and add-on benefits, and pick the most suitable one.
2. Timely Renewal of Your Car Insurance Policy
If you have missed renewing your car insurance policy in time then it means that you are headed to buy a fresh policy or start a fresh policy from the same insurer. It also involves fresh inspection – and you will have to pay for it. Imagine, the process will start afresh and you will have to pay the premium based on the fresh calculation.
It will certainly not be the same as you were paying earlier. Nowadays, you can easily renew your car insurance policy online. Tata AIG Car Insurance renewal is a simple and hassle-free process. Similarly, there are various other insurers that offer easy online renewal.
And you will lose your No-claim-bonus. So, to save yourself from paying an extra premium then it’s advisable that you renew your policy in the stipulated time and enjoy the continuous benefits.
3. Opt for Higher Voluntary Access and Deductibles
Higher deductibles can help you in paying a lesser premium. But remember then you will have to pay a portion of your sum insured amount.
One of the easiest ways to reduce your car insurance premium is by opting for higher deductibles. This would increase the cost of premium by 30 percent at least.
However, you must ascertain your financial capabilities when opting for higher deductibles. Going overboard can turn out to be heavy on your pocket. You can also change the number of deductible options at the time of renewal.
4. Miles Driven
Usually, the car insurance premium is on a lower side for cars that are not driven for a longer distance. If the number of kilometers driven by your car is more, then you might be charged with an extra premium.
5. Installation of Anti-theft Devices
Anti-theft devices reduce the possibility of your car being stolen. If you fit any device that lowers the risk of damage or theft, it will decrease the possibility of you filing a claim. Any safety measure that you take towards protecting your vehicle, like immobilizers, antilock brakes and airbags would mean a lesser insurance premium.
For all the number of years that you have not filed claim, you become eligible for a no-claim-discount or bonus. You can reduce your car insurance premium by 50 percent with NCB.
More the number of claim-free years higher will be the No-Claim-Bonus. If you are planning to change your insurer at the time of renewal or if you are planning to replace your old car with a new one then you can get your No-Claim-Bonus transferred.
7. Claim Only For Major Repairs
If you will file a claim for small damages then you will end up losing the No-claim-discount that was accredited in your car insurance account.
It is suggested that you pay-off on your own for small damages. Make sure that the repair amount is not more the amount you will save from your No-Claim-Bonus!
8. Declare The Correct Insured Declare Value
Insured Declared Value is the sum assured amount that the insurer promises to pay you at the time of claim for loss, damage or theft. IDV is derived by deducting the depreciation on vehicle parts from the original market price. It is the maximum amount that your insurer will pay against the theft or any damage caused to your car.
Registering low IDV can cost you in the long-run. It may invalidate your car insurance claim. IDV is the amount that you get from your insurer. Lesser the IDV, lesser will be the compensation.
It is advisable that you declare the correct Insure Declared Value and get the rightful claim that would also help in optimizing your car insurance premium.
9. Pay Only for What You Need
Why select features that you will never avail and why pay an extra premium for the same.
It is always better to pay for features that are useful to you in an insurance policy pay only for the features that are useful to you.
If your car is mostly parked at home then you don’t need to buy return-to-invoice cover as it won’t of much use to you. By opting out for such add-on covers in your policy your premium will be substantially reduced. While purchasing car insurance it is important for you to be vigilant and have an understanding of the features so that you pay only for what you need.
10. Add-on Covers
Apart from the basic coverage, you can also opt for additional benefits. For example, add-on benefits like zero depreciation cover protect the policyholder from paying a higher premium in the long run. However, there is a cost attached to the add-on benefits which increases the cost of the premium. It is suggested that policyholders should ascertain their needs and then pay for add-on rider benefits.
The Bottom Line
With the increasing demand for cars and their sale in India, the prices of car insurance premium will always be on a rise. To bring down the premium, the above-mentioned tips will help you in making an informed decision.