Car Insurance Premium Worries You? You can Reduce it. Know How

Buying a new car has always been an exuberant and festive occasion for most of us. I still remember the day I bought my first car. The every moment I remember thrills even today. But there was a bit of tension too somewhere in my mind. And, the expensive insurance cover the sales guy was forcing me to take for my dream car was one of them. I, being an insurance professional, wanted it to buy myself as per my choice. But he was not ready at all to leave that opportunity of making some extra bucks.

From April last year, the premium for motor third-party insurance cover has gone up. And, in India, the government has made it compulsory to have thirty-party insurance cover for vehicles running on road. Thus, the final insurance premium for your vehicle automatically increases. But there are some tips, following which, you can save on premium.

Let’s see how it works:

Compare prices of different insurers: Once you have made your mind clear and picked your dream car, compare insurance premium of different insurers. Online insurance comparison sites can help you find best rate. Also, the online channel of insurance distribution is cheaper than the conventional mode.

Increasing deductibles: Increasing the deductible components from your auto insurance, you can save on premium. Deductible is the amount a consumer pay from his pocket while making claims. However, don’t pay much and as much as you can comfortably pay. If you end up paying high insurance premium, the very purpose of your buying insurance is ruined.

Transfer benefits of your old policy to the new: If you are buying a new car, don’t forget to transfer existing policy of your old car to the new. By carrying forward the no-claim-bonus of existing policy accrued over the years, you could reduce premium rate for new policy.

Avoid making small claims: Although, the basic purpose of buying insurance for your car is to cover expenses incurred out of repairing of damaged car; but making every small claims don’t help you fulfill your need. Once you make a claim, no matter how small it is, you lose the unique benefit of No-Claim Bonus. No-Claim Bonus is accrued for every claim-free year over the period, maximum up to 50 per cent, resulting into 50 per cent discount in premium for next renewal of your car insurance.

Sometimes claimed amount is lower than the sum of processing charge and loss of No-Claim Bonus. The best way to utilise your insurance is get all small damages repaired at local workshop. That will cost you less.

Install safety devices in your car: Insurers appreciate vehicles equipped with safety devices such as-anti-theft device, steering wheel lock, gear-lock or anti-theft alarm. You can save on premium up to 5 per cent.

You can also avail discount on premium if you are a member of organisations such as- the Western India Automobile Association (WIAA) or the Automobile Association of India (AAI). These organisation are empowered under the Motor Vehicle Act and Rules. And, members of such organisations are considered to be ‘safe drivers’.

I hope the information shared will proved to be insightful.

Harjot Singh Narula

Harjot Narula is founder and CEO of ComparePolicy.com, an IRDAI approved insurance web aggregator focussed on selling online insurance for companies. Harjot has more than a decade of experience in software development and has also spent 5 years in US working for the mortgage and risk management industry.

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