The only time most of you may think about vehicle insurance is when there is an accident, injury to the vehicle, or a ticket. But, for the very purpose of shielding you and your car from being compromised, motor insurances are extremely important. In end of 2018, the IRDAI (Insurance Regulatory and Development Authority of India) raised motor insurance personal accident cover to Rs. 15 lakhs from Rs. 1 lakh, making people to pay more premium than usual.
Customers now have to purchase the third-party policy for a longer tenure, which is 3 years if the vehicle is a car, and 5 years, if it is a two-wheeler. A mandatory personal accident cover has to be availed at annual premium of Rs. 750 for the owner-driver. While the decision certainly caused a hike in insurance prices, it also had its share of benefits.
So, how can you make your car insurance cheaper despite a hike in premiums? Today, we will discuss how to keep the costs of motor insurances lowest as possible.
Table of Contents
Compare Policies Before Purchase
Before taking a policy, spend some time to compare across providers. Most people avoid this step, especially when renewing the policy. An easy step to compare is go online and compare policies, and check out the features, additional covers, and other benefits. Within a half an hour, you will be able to understand, which policy is the most affordable and best-suited for your needs.
Do Not Opt for Something You Do Not Need
So what is covered and what is not covered? Have you gone through the details of the policy? Is there any additional feature such as Road Side Assistance, lifetime guarantee on repairs, rental car in the instance of car being stolen, etc? These attractive features sound too good to be true? Well, you can avail additional services at an additional cost.
Skip the services you do not need and reduce the premium cost. For instance, if you use the vehicle only to commute short distances or busy road where garages are at proximity, then you may not need Road Side Assistance service in the insurance.
Read the Fine Print
Do not blindly the sign the application form by choosing the cheapest policy available. You should never make assumptions about the policy, and trust only what the insurance agents or the product brochure promises. Go through the fine print of the policy in detail and understand how well you are covered under different circumstances.
For instance, will you get coverage if someone else driving your car, meets with an accident? If you are taking the vehicle insurance policy online on an aggregator site, check the details of this website and the insurance provider as well.
Take Advantage of Discounts
Based on your driving record, age, profession, and other criteria laid down by the insurance company, you can get a discount on the premium. So, check with the provider if you qualify for a discount. You can also avail discounts, if you are a member of WIAA or AAI.
Increase the Voluntary Deductible
There is an amount you may agree to pay for claims on the insurance or vehicle repairs, before the policy covers other costs. This amount that you pay is known as voluntary deductible, whose value you can choose at the start of taking a policy or during its renewal. Higher the voluntary deductible, lower will be the premium amount. While the idea may seem fetching, choose a deductible amount that you can afford.
If you opt for a larger deductible to reduce yearly premiums, but cannot afford the former, then the purpose of the claim is also defeated, leaving you in a financial mess. For instance, you have a claim of Rs. 20,000. The deductible is Rs. 15,000. Now, if your premium amount for a year is Rs. 15,000, the same can reduce to Rs. 12,000 given the higher voluntary deductible. So at time of a claim, you have to pay Rs. 15,000 on your own, and the insurance company will pay Rs. 5,000.
Renew the Policy Before it Expires
Do not wait for your existing vehicle insurance policy to expire, before you can renew it. Renew it at least 45 days prior to expiry. In this case, if a price hike occurs in the period, the price you chose the policy for, is locked in, and you do not have to bear the hiked amount. Lapsing on the policy also means that the vehicle will not have any insurance protection.
Value of the Vehicle
You can save paying large on motor insurance premiums by simply calculating the vehicle’s value beforehand. For instance, calculate the market value of your car before renewing the policy. This will help you know the depreciated value as per the current date. You can then easily negotiate with the insurance provider for the best rate on the premium.
Install an Anti-Theft Device
If you can convince the insurance company that you have protected your car by installing anti-theft devices, the company may offer you a discount on premiums at least by 5 percent. As the provider is convinced that you have taken enough care and means to safeguard the vehicle, it may consider you as a lesser liability. It means you may avoid making claims at least because of car theft.
No Claim Bonus (NCB)
If you do not make any claims in the preceding year, then you will get No Claim Bonus on the insurance. You can claim this bonus when renewing the policy. The NCB will be deducted from overall price of the insurance, and you will have to pay lower premium amount. If you keep a clean record of driving, then the No Claim Bonus in the future can reduce the premium amount by up to 50%.
So, do not be wary of insignificant change in premium cost because of hike in personal accident cover. It is for your benefit after all. But, if you are still worried about the little increase in the insurance cost, then you can follow the above-mentioned tips to balance of this increase, and considerably reduce the premium amount.