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. 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 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 the 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 the insurance premiums of different insurers. Online insurance comparison sites can help you find the best rate. Also, the online channel of insurance distribution is cheaper than the conventional model.

Increasing deductibles: By increasing the deductible components from your auto insurance, you can save on premiums. A deductible is an 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 the 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 the existing policy of your old car to the new one. By carrying forward the no-claim bonus of the existing policy accrued over the years, you could reduce the premium rate for a new policy.

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

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

Install safety devices in your car: Insurers appreciate vehicles equipped with safety devices such as anti-theft devices, steering wheel locks, gear-lock, or anti-theft alarms. You can save on premiums up to 5 percent.

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

I hope the information shared will prove to be insightful.