Road accidents are unexpected. Therefore, when you buy a new car, getting its insurance policy is crucial to protect yourself financially from misfortunes. Under the Motor Vehicles Act, 1988,
car insurance is a mandatory requirement with at least a third-party policy.
There are many car insurance companies that provide excellent policies. However, you must compare different policies and get the best deal for your insurance plan. So, here are some effective tips that will help you reduce your car insurance premiums.
What is Car Insurance?
Car insurance, also referred to as auto or motor insurance, is an agreement between a policyholder and an insurer, and the insured person agrees to pay premiums on a regular basis. In exchange, the insurer helps the policyholder by providing financial protection if his/her car suffers any losses due to unfortunate events like accidents, thefts or damages.
Top 10 Tips to Reduce Car Insurance Premiums
Here are the top 10 tips that will help you reduce car insurance premiums.
1. Compare Different Car Insurance Policies
There are many insurance companies in India that offer different car policies with greater benefits and other attractive deals. Hence, it is crucial to compare the insurance policies provided by different insurers. This will not only help you review premium rates provided by different insurance companies but also support you in choosing the best plan as per your requirements.
2. Avoid Making Unnecessary Modifications
Making modifications to the car by changing colours, installing alloy wheels or adding expensive devices may lead to a higher car insurance premium. This is why you should avoid making unnecessary modifications, or if you do so, then you must inform your insurance provider.
3. Avoid Filing Claims for Minor Damages
Filing claims for minor damages can increase your premium. Minor issues are mostly affordable. Hence, you must use your insurance claims for major misfortunes.
4. Raise Voluntary Deductibles
Most insurance plans have voluntary deductibles that are part of the claim amount the car owner agrees to pay if a claim is filed. Choosing to pay the higher deductible will reduce the liability of your insurer, which will further offer a car insurance policy at a lower premium rate. However, you must select the amount you can afford to pay during claim settlement.
5. Avoid Unnecessary Add-ons
Though add-ons can provide extra benefits for your car insurance plan, they make your premium go high. Therefore, go for add-ons if it really requires. For instance, for a person living in an area which is prone to waterlogging, an engine protection cover is required. But, investing in such add-on covers is not needed for the person who does not live in such an area.
6. Transfer NCB to the New Plan
If you buy a new car and sell the old one, then it is advised to transfer the NCB (no claim bonus) of your old car insurance policy to the new one. It will help you reduce your new car insurance premium.
7. Install Anti-theft/Security Devices in Your Car
ArrayInstalling anti-theft/security devices can help reduce the risk of car theft. Along with higher safety, it will also lower your car insurance premium amount.
8. Renew Your Car Before it Expires
It is crucial to renew your car insurance policy before it expires. In case you do not renew your policy on time, you will not earn the NCB and cannot get the discount on your car insurance premium.
9. Maintain a Clean and Safe Driving History
Safe driving is not only beneficial for you but also for the people on the road. And, insurance providers offer insurance policies at low rates to car owners who have a clean and safe driving history, have not been involved in any road mishaps and have not violated any traffic rules.
10. Choose ‘Pay as You Drive’
'
Pay as Your Drive Insurance' is a new concept in the Indian car insurance industry that is offered by only some selected insurance companies. As per this facility, the insurer charges a premium based on the kilometres covered. If you do not drive regularly, you can decrease your car insurance premium.
What Factors Affect Car Insurance Premiums?
Some of the common factors are mentioned below that affect car insurance premiums.
● Age of the Car
Older cars can have more troubles than new cars. Thus, car insurance premiums increase with the age of the car.
● Car Model
Top-model cars affect auto insurance premiums as the cost of repairing or replacing their parts is much higher.
● Types of Car Insurance Policy
Types of policy also affect car insurance premiums as comprehensive insurance offers extensive coverage if compared to third-party policy. Hence, it results in the high cost of car insurance.
● Engine Capacity of the Car
A car with greater engine capacity sets a high risk to the insurer. This is why the cost of car insurance is higher for cars with bigger engine capacity.
● Location of the Car
If your car suffers damage in a high-risk area, such as highways, densely populated cities, mountains and urban areas, then the car insurance premium would be higher.
● Claim History
Having a poor claim history leads to a higher premium for car insurance. However, if you have not filed any claims in the past year, then you can get NCB (no claim bonus) which helps you reduce your car insurance premium.
● Car Modifications
If you have made any modifications to your car, then there would be the possibility of getting greater losses if your car suffers damage. Therefore, the car insurance premium for a vehicle with modifications is higher.
Conclusion
A car insurance policy is essential for every car owner to protect himself/herself financially from any unfortunate events. So, follow the above-mentioned tips that can help you reduce car insurance premiums when buying or renewing your policy. However, comparing different car insurance policies is a wise decision.
