How to Reduce Your Car Insurance Premium in India?
In today’s world, most individuals own a carand few own two wheelers too. While maintenance charges may not be in your control, insurance premiums is one areas where one can try and reduce costs.
How car insurance premium is calculated?
There are various things that affect car insurance premium:
A) Vehicle related: Which includes year of make, fuel type, capacity etc.
B) Location related: Vehicle registration place. During renewal of insurance, depreciation would be deducted and car insurance value is determined. Based on the value of the car, insurance premium would change.
C) Add-ons in your car
D) Benefits what you get from car insurance.
Also Read: Best Term Insurance Plans in India
How to Reduce Your Car Insurance Premium in India
1) More Add ons/ accessories in the car, more premium you pay: Your car insurance premium is generally computed at basic level coverage based on vehicle value, vehicle age, fuel type of vehicle. LPT fittings or or ultrasound sensors etc., added to your car, would alter your car insurance premium. If possible, try to reduce such add ons or accessories in the car.
2) Premium depends on location: If you stay in an area where crimes rate is high, your car insurance premium rates would be high. Check the possibility of taking car insurance policy in a location where you would not pay high premium due to this.E.g.you can take policy from your home town instead of the metro city where you live.
3) Special Benefits would increase premium: Many companies offer special benefits like road side assistance in case of vehicle failure, however they come with additional premiums. If you love long drives, such special features would benefit you. However, if you just drive in your own city, it is better to avoid such benefits and reduce your premium.
4) Adding insurance for personal belongings: If you are adding insurance for theft of personal belongings, car lock, music system etc., this would add to your insurance. Try to reduce this as much as you can.
5) No claim bonus: When you do not have any claim in a year, you are eligible for no-claim bonus in subsequent car insurance premiums. Many insurance companies offer 30% to 50% deduction from premiums if you are not claiming for more than 3-5 years continuously. Stick to one insurance company so that you can benefit from NCB. Even if you have a small claim, pay your own money instead of claiming from insurance company so that you are entitled for high NCB in long run.
6) Safety and Anti-theft features reduces premium: If your vehicle has safety and anti theft features like airbags, anti-lock brakes, it would help you to reduce car insurance premiums.
7) Policy Lapse increases premium: Many of us do not pay attention to this point. You should renew policy every year without fail. You should not make sure that your policy does not lapse. Insurance companies can disqualify the discounts and benefits you may receive from further renewal of insurance premiums.
8) Online car insurance plans come cheap: These days a majority of the insurance companies offer online car insurance plans which comes with low premiums comparing to offline policies. These can be easily taken online and renewal can also be done with simple steps.
9) Same insurance company, multiple policies, reduces premium: If you are have some other policies with same insurance company, they would offer discounts / benefits which would help you to reduce car insurance premium. In some cases, they would offer coupons for free washing, free limited servicing which can indirectly benefit you.
10) Compare car insurance plans before you buy: There are a few websites like policybazaar.com, policy.com etc., which offers comparison of car insurance plans and their benefits. You should compare the car premiums or two wheeler insurance premiums and benefits before taking the insurance policy.
If you like this article, please share this on your Facebook or Twitter. This would be a special gift which you would be giving to our blog.
How to Reduce your Car Insurance Premium in India
- 8.75% IIFL Finance NCD – Sep-2021 issue – Should you subscribe? - September 25, 2021
- Goal-Based Investing – How to evaluate and implement financial goals? - September 24, 2021
- 12.68% Indel Money NCD – Sep 2021 – Should you invest or avoid? - September 23, 2021