You may reduce the cost of your car insurance premium not only by customising your coverage, but also by being aware of a number of other issues. Here are some methods for lowering your auto insurance rate.
When you purchase a vehicle, you pay for convenience. Aside from maintenance, you must also pay for the vehicle’s insurance, which consists of two parts: ‘third party’ and ‘own damage,’ generally known as ‘comprehensive’ insurance. While the former covers any damage or injury caused by a third party in the event of an accident, the latter covers damage to your vehicle. Is it possible to lower this financial burden, or are both premiums fixed?
“In terms of third-party liability, the premium is set and the coverage is necessary as per the Motor Vehicle damage risk; the premium is dependant on the kind of coverage needed,” says Rakesh Jain, CEO of Reliance General Insurance. This implies that you may reduce the cost of your comprehensive insurance not just by customising your coverage, but also by being aware of a number of other aspects. Here are some methods for lowering your auto insurance rate.
1) Purchase ‘Pay as you Drive’ Insurance.
This is a relatively new idea in the Indian car business, and it has been accessible since 2020 under Irdai’s regulatory sandbox conditions, with just a few insurers permitted to advertise it. “It’s a usage-based solution in which the insurer charges a premium only for the amount of kilometers specified at the start of the contract.” “The insured, on the other hand, receives the same advantages as under a standard comprehensive policy,” Jain explains. So, if you just drive on occasion, this is a smart approach to save money since fewer miles equal a cheaper premium.
2) Do not Purchase All Add-on Covers.
Base cover may not cover all types of damage. Add-ons broaden the extent of your comprehensive coverage, but also boost your cost. “You should choose the add-ons based on your needs.” So, if you don’t live in a water-logged location, you don’t need the engine protection plan,” explains Ashwini Dubey, Head of Motor Insurance Renewals. “There are a few less critical add-ons that cost the same as others,” explains Ankit Agrawal, Co-founder & CEO of Insurance. As a result, you may simply avoid policies like as daily allowance coverage or loss of personal possessions coverage.
3) Avoid making Too Many Adjustments or Enhancements.
If you make any changes to your automobile, such as adding a CNG kit or an electronic gadget, you must notify your insurance since it may affect your rate. If you do not notify, your claim may be denied later. “Theft-inducing modifications, such as wheels, automobile interiors, or painting, should be avoided.” Similarly, every alteration in engine or mechanics to boost power or acceleration increases risk and raises premiums,” says Aatur Thakkar, Co-founder & Director, Elephant.in, Alliance Insurance Brokers. Other modifications to avoid include bull bars, pressure horns, tinted head or tail lights, faux carbon fibre, flashing brake lights, and over or undersized rims and tyres, according to Agrawal.
4) Avoid Making Minor Claims.
If your vehicle sustains minor damage, such as scratches or tiny dents, you should avoid filing a claim since you will be ineligible for a no-claim bonus (NCB) at the next renewal. NCB is a premium reduction offered by your insurer in exchange for not submitting claims throughout the policy period. It may vary from 20 to 50 percent. You may take advantage of this if you renew your insurance within 90 days of its expiration. “So, if your automobile damage is worth Rs 2,000 or so and you are expected to get a Rs 6,000 NCB next year, it is wiser to pay the amount out of your own cash,” Dubey explains.
5) Fit Anti-Theft Devices on Your Vehicle.
Another simple strategy to cut your auto insurance cost is to lessen the likelihood of the vehicle being stolen. The greater the level of security, the lesser your premium. “You may accomplish this by installing anti-theft equipment like as gear locks, anti-theft alarms, and steering locks from registered manufacturers to earn a premium price,” Thakkar explains.
6) Increase your Deductible.
The deductible is the amount you pay out of pocket before the insurer covers the claim. The bigger your deductible, the cheaper your insurance cost will be. So, if you are confident in your driving abilities or do not drive much, it may be a good idea to choose a greater deductible to lower your rate.
7) Transfer NCB to new Vehicle
If you have accumulated a sizable no-claim bonus over the last 6-7 years and are preparing to purchase a new automobile, you might significantly reduce your rate by moving the NCB from your previous insurance policy to the new car insurance.
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8) Be a Member of a Car Club.
Another easy trick that might earn you a set discount on auto insurance is to join registered organizations such as the Automobile Association of India (AAI) or the Western India Automobile Association (WIAA).
9) For Older Vehicles, Only Third-Party Coverage is Recommended.
“While third-party insurance protects you financially against the death, injury, or property damage of a third party in an accident involving your vehicle, own-damage insurance protects you against expenditures spent due to damage to your own automobile.” So skipping out on a complete policy to save money is a bad idea,” adds Jain. However, if the value of your automobile is extremely old or you are going to sell the car soon, then selecting solely for third-party insurance is suggested since it is less expensive than comprehensive coverage,” explains Thakkar. Furthermore, you may spend less on repairs than you do on the comprehensive insurance price.
10) Pay Premiums on Time and Purchase Insurance Online.
Comparing and shopping for insurance online, as well as paying your premium on time, are two easy strategies to minimise your premium. “If you don’t pay your premium on time, the insurer may see it as a risk and hike your premium amount,” Dubey explains.