Having a car insurance for sure, provides you a cover against vehicle damage or injuries sustained to the third party. Driving with a third-party cover is legally binding, however, with a comprehensive insurance cover, you can get cover for your own damage. Considering the wrecked roads and harsh traffic conditions, it is essential that you get a proper insurance cover for your car.
When it comes to the cost of insurance, everyone must be looking for ways to reduce the premium. In this article, we are providing you some helpful options that would help to reduce the car insurance premium.
1. Increase Deductible
Deductible is an amount of money that you need to pay, when you make a claim. At the time of buying or at renewal of the policy, you need to choose the voluntary deductible amount.
If you choose a higher deductible value, your premium tends to decrease. The reason being, upon choosing higher deductible amount, you have to pay a high amount towards the claim and the insurance company will cover you for a lesser portion of the claim amount. There is a less risk on the insurer’s side, so the premium levied will also be the less.
Say, you have a claim of Rs 12,000 and your deductible is Rs 8,000. In this scenario, the insurance company will pay only Rs 4,000 out of the total claim amount. Your premium will also decrease to a specific percentage, as applicable under the policy.
It is advisable to increase the deductible to an extent, you can afford easily.
2. Accumulate No Claim Bonus (NCB)
If you don’t make any claim during a previous year or consecutive policy years, you become eligible to get the benefit of No Claim Bonus. It is a reward offered by the insurance company for not making any claim. The NCB benefit is available on the premium component payable towards own damage cover. This benefit is available in the form of premium discounts varying from 20% to 50%, depending on the duration for which you did not make the claim.
If, you get a comprehensive car insurance policy with the premium of Rs 17,000, out of which the premium for own damage cover is Rs 13,000. In case, you did not make claim for two consecutive policy years, so you can get the NCB of 25%. With the NCB benefit, your premium will be reduced to Rs 13,750 and you save Rs 3,250 in premium due to No Claim Bonus.
3. Transfer No Claim Bonus
If you are replacing your old car with a new one, don’t ever forget to transfer the No Claim Bonus. NCB is linked to the policyholder not to the vehicle. So, on buying a new car, you can easily transfer the NCB benefits of your old car to a recently purchased car. You just need to inform the insurance company about the transfer of NCB and they will issue you an NCB certificate that will help you reduce insurance premium on a new car. The NCB certificate remains valid for three years.
4. Anti-Theft Devices
Installing anti-theft devices secure your vehicle against the probable theft and robbery. It obviously reduces the chances for claims, so the insurance company offers you the discount of 2.5 percent up to a maximum of Rs. 500. This discount is available on the Own Damage component of the annual premium amount.
When choosing the anti-theft device, make sure it is approved by Automobile Research Association of India (ARAI). You can install anti theft devices such as alarm, steering wheel lock, keyless lock device, electronic immobilizers, vehicle tracking, etc.
5. Compare Plans & Buy
All insurance companies have started offering their plans online. When looking to buy the best car insurance policy, it is advisable to compare plan features and benefits online. The insurance comparison portals also provide you the flexibility to compare car insurance quotes online, so you can choose a plan that offers all the required coverage at low premiums.
Comparing and buying a plan online helps you save on the insurance premium.
6. Renew Policy Before Lapse
It is advisable to renew the policy before it lapses. In case, your car insurance is lapsed, you need to get a fresh insurance that requires to to get your vehicle inspected again and there are chances that your premium may be increased. Not only this, with the lapse of a policy, you will also have to lose your accumulated NCB benefit.
If you are looking to reduce the insurance cost, it is recommended to renew the policy before it lapses.
7. Membership of Automobile Association
If you become a member of one of the registered automobile associations such as Automobile Association of India, the insurance companies offer a discount on premium. Having a membership of Automobile Association of India, you can get a 5% discount on own damage premium, subject to a maximum of Rs. 200.
8. Get Only the Required Coverage
When buying a new car insurance or renewing an existing one, it is recommended to choose the coverage that you need. Having unnecessary add-ons or additional covers will only increase the cost. There are several add ons that can be opted under a car insurance policy, such as Zero Depreciation Cover, Engine Protector Cover, Roadside assistance Cover, Key Replacement Cover and many more.
You only need to choose the add ons that enhance the protection for your car. Choosing only the required cover under your policy will facilitate your way to reduce the premium.
A car insurance policy provides cover for Third-Party Liabilities and you can also obtain an Own Damage cover to secure your vehicle against probable perils. You can get the most affordable and cheap insurance for your car by following the key points mentioned in this article. It would be a prudent move to do a car insurance comparison and choose the best car insurance plan, which offers you the required coverage at a low premium.