Third-party premium has changed from 1st June. Renew now
Top 10 Tips on How to Decrease Car Insurance Premium
Road accidents are unforeseen. Therefore, buying a car insurance policy is crucial to protect yourself financially from mishaps. However, insurance premium rates are rising. So, read this blog as it highlights effective tips on how to reduce car insurance premium so that expensive premium rates don't deter you from buying an insurance plan for your car.
10 Tips on How to Reduce Car Insurance Premium
Here are 10 ways through which you can reduce the premium payable towards your car insurance policy:
- Compare Car Insurance Policy: Several insurers in India offer benefits and other lucrative deals on car insurance policies. Therefore, comparing the car insurance plans offered by different insurance providers online is essential. This step will help you to review premium rates and other terms and conditions provided by varying insurers and assist you in selecting a plan that fits your requirement.
- Avoid Buying Unnecessary Add-ons: Add-ons provide additional financial coverage over and above your comprehensive car insurance plan. However, it increases the premium payable towards your car insurance scheme. Therefore, purchase an add-on that you actually require. For example, if you live in an area prone to waterlogging, you may opt for an engine protection cover. If you do not reside in such an area, there is no need to invest in such additional covers.
- Raise Voluntary Deductibles: A voluntary deductible is the portion of the claim amount the car owner voluntarily agrees to pay if they file a claim. Opting for a higher deductible will reduce the liability of a car insurer, which will further bring down the premium payable toward a car insurance plan. However, determine the amount you can afford to pay out of your pocket and adjust the deductible accordingly.
- Avoid Filing Claims for Minor Damages: Paying the repairing cost for minor damages out of your pocket is ideal as small vehicular damages are not very expensive. Filing claims for minor damages leads you to lose accumulated NCB or No Claim Bonus. Under No Claim Bonus, you can avail a discount on premiums from your insurance provider for not raising claims against your car insurance plan within the policy tenure.
- Renew your Car Insurance Plan Before Its Expiry: It is essential to renew your car insurance plan before its expiry. If you do not renew the same on time, you will lose the accumulated NCB and cannot avail of the discount on the premium payable towards the car insurance plan.
- Transfer NCB: If you are planning to purchase a new car after selling the old one, remember to transfer the accumulated bonus of your old car insurance policy to the new car insurance for your newly purchased car. This will help you to lower the premium payments of your new car insurance scheme.
- Install Anti-theft Equipment in Car: You can install anti-theft devices, such as anti-theft alarms, gear locks, etc., to lower the risk of car theft. This implies higher safety and will further lower the premium payable towards your car insurance policy.
- Avoid Making Car Modifications: Modifying your car by installing alloy wheels and adding other expensive devices like ultrasonic sensors may increase the premium payable towards a car insurance plan. However, inform your insurance provider if you are still keen to modify your car. Failure to do the same may invalidate your car insurance plan.
- Become a Member of an Automobile Association: Another simple way to get a discount on the premium of a car insurance plan is to join registered automobile associations. These include associations like the Western India Automobile Association and the Automobile Association of India. The Motor Vehicles Act register these associations, and members of these associations are considered 'safe drivers'. Therefore, the latter gets special discounts and benefits on the car insurance premium.
- Select 'Pay As You Drive': 'Pay as You Drive' is a new concept and has been introduced in the motor insurance industry of India since 2020. Only a few selected insurance providers offer this facility. Under this, the insurance provider charges a premium for the kilometres fixed in the insurance policy document. If you do not drive frequently, this is one of the best ways to decrease the car insurance premium.
Why Buying Cheap Car Insurance Is Not Always a Good Idea?
1. Impacts Policy Coverage
All auto insurance policies offer financial protection for the vehicle of the insured. However, the degree of coverage may vary with policy. The amount of coverage an automobile insurance policy gives incredibly impacts its valuation. In the case of auto insurance, a cheaper premium typically translates to less coverage.
A cheap auto insurance policy may provide third-party insurance, the most basic type of coverage. Since third-party insurance only protects you against third-party liability, an accident resulting in loss or damage to your car could result in significant financial losses.
2. Might Not Offer Essential Benefits
An automobile insurance policy combines essential protection and advantages provided by an insurance provider. In this regard, insurers' coverage benefits are decreased, which lowers the cost of auto insurance. Hence, a cheap policy might deprive you of getting essential benefits.
So, comparing different auto insurance plans and conducting a cost-benefit analysis is crucial. It will assist you in determining whether or not a cheap auto insurance plan comes at the expense of necessary advantages.
3. Has Higher Deductibles
The higher deductibles that come with the cheapest auto insurance policies are an additional disadvantage. A deductible is a portion of the claim amount that the policyholder/car owner pays at the time of claim settlement, according to the uninitiated.
Your vehicle insurance provider will pay its portion of the claim amount after you have paid your deductible. The insurance will bear less of the cost of the claim the greater the deductible amount. So, if the deductibles are more significant, insurance firms provide automobile insurance plans with reduced costs.
4. Might Not Offer Cashless Claims
The ability to submit claims without using cash is one of the best features of car insurance. A car owner can raise cashless claims to fix their four-wheeler at one of the insurer's network garages.
In this regard, you could only have the choice of reimbursement claims regarding inexpensive auto insurance coverage. However, if you choose an all-inclusive car insurance plan, there is a potential that you will need to pay for your vehicle's repairs out of pocket to make cashless claims.
5. Might Have Poor Customer Service
Comprehensive coverage, broader perks, and effective customer service might be included in a reliable auto insurance plan. On the other hand, a cheaper auto insurance policy might only provide less protection, fewer extras, and average customer support. Also, the insurer might offer you only some of the essential services and can have a lax customer service system.
So, follow these effective tips on how to reduce car insurance premium. Besides, beware of falling into the trap of car insurance providers offering cheap or free insurance plans. Such free offers may be available for the first year of the policy term, and you cannot customise the same at your convenience. Finally, remember to read the policy document carefully before investing in any car insurance plan to avoid hassles in future.