While motor insurance premium costlier is a necessary expense to protect you and your vehicles, there are always ways to make it less expensive than it has to be.
The ever-increasing inflation rate has forced all of us to cut corners wherever possible in order to keep up with our essential expenses, one of which is our vehicle and its maintenance. Certain costs associated with the vehicle, such as fuel, servicing, and motor insurance, cannot be avoided. Regardless of how you use your vehicle, motor insurance is a legal requirement that the vehicle owner must follow. Aside from being a legal requirement, motor insurance is a wise investment to protect one of your most prized possessions.
Accidents are all too common on Indian roads, and motor insurance protects you from the costs associated with them. Third-party insurance is a legal requirement, so it cannot be avoided. When it comes to owning damage cover, new car owners are required by law to purchase a 1-year comprehensive+3-year TPI policy at the time of purchase. This effectively means that the owner only needs to purchase a Standalone Own Damage policy for the second and third years. While auto insurance is a necessary expense to protect you and your vehicles, there are always ways to make it less expensive than it has to be.
Let’s go over some of the factors that can raise the cost of your premium.
Using the NCB inefficiently
The NCB, or no-claim bonus, is a key feature in your car insurance policy that not only helps you save money but also encourages safe driving. NCB can help you get up to a 20% discount on your first year of no claims, a 25% discount for two years, a 35% discount for three years, and a 45 percent discount for four years if they make no claims. However, if you do not use the NCB effectively, you risk losing this discount and paying a higher premium than necessary.
Damage to your vehicle is almost unavoidable once it is on the road. However, make certain that you do not file a claim for minor damages. In such a case, pay for the repair out of your own pocket. If you file a claim, you will lose your entire accumulated NCB, which may cost you more in the long run. Aside from that, if you change vehicles or insurers, remember to transfer your no-claim bonus if you want to keep paying a lower premium.
Buying insurance from a dealer in a hurry
Dealers frequently profit from your eagerness to drive your brand new car home as soon as it arrives. For a long time, most car buyers received car insurance as part of the package. However, we’d like to ask you to hold your excitement a little longer and set aside some time for insurance research. This is a critical component of your purchase that will have a long-term impact on your rides; therefore, do not buy the first deal you come across. Dealers are not insurance experts because it is not their primary focus. Furthermore, they only work with a few insurers, which limits their subject matter expertise and your options. Furthermore, they intend to profit from this collaboration, so they may offer you a deal that is more expensive than you require.
Not shopping and comparing prices online
The digital shift is visible in multiple ways across all industries – insurance is no exception. Because auto insurance is required, Covid has pushed its online purchase as a convenient and secure method of payment. However, the advantages of purchasing auto insurance online extend beyond this. Buyers can easily compare prices, features, add-ons, and everything else they need in one place, all at their fingertips, by accessing a plethora of policies online. This allows them to tailor their policy to their specific needs and save money on the premium. Furthermore, an online distribution channel is always more cost-effective for both the buyer and the seller, lowering the policyholder’s premium.
Inadequate understanding of the impact of deductible
Often, buyers are unaware of the effect deductibles can have on their policy or premium. A deductible, also known as a voluntary deduction, is an expense borne by the vehicle owner when filing a claim. It is critical to select your deductible wisely. It may differ from one consumer to the next. If you are an experienced driver who does not need to file claims frequently, you can choose a higher deductible, which will lower your premium. If you leave it at zero, you will receive the entire claim amount but will have to pay a higher premium.