Buying a car can be a long-cherished dream of many, but the dream can be a costly affair. From shelling out money for buying the car to the rising fuel prices, from the regular maintenance to the cost of car insurance premiums – everything can put a dent on the dream!
So, if you have ever wondered how you can save on your car insurance premiums, then you are not the only one. When it comes to buying car insurance, the cost of premium deters many people. But as you know, car insurance is not just necessary for you and your car’s safety, but it is also a legal mandate in India. Does that mean you have to continue to pay high car insurance premiums? Of course not! There are many ways in which you can lower your premium and save on your car insurance costs. Want to know more? Read on!
How to Save on Your Car Insurance Premium?
- Choose the Correct Insurance Policy:
It is imperative to choose the right coverage for your car. You can take a two-pronged approach here:
- Compare the Premiums – Remember to do your homework and compare the features and premiums of different providers. Find a cost-effective policy that offers the best coverage at attractive premium prices.
- Necessary riders only – Do not get thrown by the plethora of add-ons available with a car insurance policy. Evaluate the added coverage offered by each, assess your own needs and choose them based on relevance and priority.
Also, it is important to go for a reliable car insurance provider, with a good Claim Settlement Ratio. Instead of blindly opting for a cheap policy, go for reputable insurers like Tata AIG.
- Capitalise on the No Claim Bonus:
When the insured does not make any claim during one policy period, they are entitled to a No Claim Bonus (NCB) during renewal. The NCB can start from 20% for the first year, and go up to 50% in the subsequent years. However, even a single claim for small repairs can cancel out the NCB. Thus, it is crucial to weigh the cost of repairs against the NCB benefit. If the repair costs are high, then you should definitely avail your insurance claim. However, if you can manage to pay the costs from your pockets, you should avoid the insurance claim. NCB increases with every no-claim year, thereby helping you save on insurance premiums.
- Opt for a Higher Deductible:
Voluntary deduction implies the percentage of the claim amount to be paid by the policyholder. If the voluntary deduction is zero, then the entire claimed amount is paid by the insurer. However, if the voluntary deduction is 10%, then the insured pays 10% of the claim amount, while the remaining 90% is borne by the insurance company. The higher the deductible, the lower will be the premium cost. However, it is vital to evaluate all the possibilities, including your financial capabilities, before finalising the deductible.
- Spruce up the Security of Your Car:
Sprucing up the security of your car not only protects you and your vehicle but also helps to bring down the cost of the premium. As mentioned before, the risk perception of the insured determines the cost of the car insurance premium. When you fit your car with safety features like anti-theft devices, air-bags, etc. it positively impacts your risk assessment by the insurance company. Thus, you have to pay a lower premium amount.
- Pay Your Premiums on Time:
Timely renewal of your policy ensures continued coverage and lowers the premium outflow. While a policy lapse can result in the cancellation of your No Claim Bonus, late renewals can lead to late payment charges. In both these cases, you end up paying a higher insurance premium. Put a reminder for your renewal dates or opt-in for regular reminders by the insurance provider. Make sure that you renew your policy and pay the premiums on time.
- Bur Car Insurance Online:
The advent of online car insurance has simplified and streamlined the purchase and renewal of car insurance policies. Buying car insurance online not only adds to the ease of the process but also helps you avail lower premium prices. Firstly, you can compare multiple car insurance online and choose the one with a lower premium. Secondly, insurance companies capitalise on the low operational costs and offer varied discounts on online purchase of policies. Thirdly, the elimination of intermediaries subtracts the agent commission component from the premium amount. Thus, buying car insurance online can help you get low car insurance premiums.
- Join Road Safety Organisations:
Organisations like the Automobile Association of India are actively involved in promoting road safety. Getting membership of such organisations, along with a host of other benefits, can help you avail concessions on your car insurance premiums.
The rising cases of road accidents and low insurance penetration have made motor insurance a legal mandate in India. Therefore, it is imperative to buy a car insurance policy to safeguard you and your car and cover the damages caused to a third-party. However, it is also important to ensure that you get the best deal for your car insurance premium. So, follow the aforementioned steps and save more on your car insurance premium.
As is rightly said – “A penny saved is a penny earned.”