Car insurance is an umbrella that protects you financially when you are behind the wheels. Not only is it a legal requirement in India, but car insurance also has other important advantages that can save you from a sudden and unexpected financial hit. Car insurance is a subject about which most motorists are clueless, and they blindly follow the advice of the car dealership. Do you know that if you follow certain tips, you can save a decent amount of percentage on your car insurance premiums? In this era of e-commerce, we now get many facilities online and an option to get car insurance coverage or renewal online is one of them. Online insurance purchase has given many tools that can equip a buyer to save money. Here are five tips on how to reduce car insurance premiums-
1. Don’t play blind
The biggest mistake that we make is to follow the car dealer blindly when it comes to car insurance. Surely it is convenient when you get all your needs fulfilled at a single place, but your car dealer only cares about his margins. When you buy a new vehicle, or it’s time to get your old car insurance renewed, make sure that you get a fair idea about the prevailing market prices. Websites like Policybazaar are a great source. Arm yourself with this knowledge and if you see that your dealer is charging more, then ask him to match the prices. If the dealer is not ready to budge, then you can simply buy your car insurance online. While buying a new vehicle, most car dealers have tactics where they force you to buy insurance through them. This practice is highly against the insurance regulatory rules, and you can take action against the dealer.
2. Go for bigger insurance companies
Another important tip on how to reduce car insurance premiums. Purchasing car insurance through known names or bigger companies can be very beneficial. The insurance sector is based on cut-throat competition, and the bigger companies make sure that they remain at the top of the game. What’s more, the bigger car insurance companies give discounts if you are making multi-vehicle insurance or going for long-term insurance coverage. You also get loyalty points and other incentives if you stick with a particular insurance company for a longer time. The bigger companies also provide a sliding scale where you can select your IDV value and remove other add-ons to bring the overall premium amount down.
3. If you have an old car
As your vehicle gets older, the overall value of your vehicle also starts to come down, and for a car that is 15-20 years old, the IDV gets too low. In that case, you can opt for basic third-party coverage and bring down your insurance premium to a bare minimum. It is not wise to have comprehensive coverage when your IDV will be around 10 thousand INR on average. It will not help you to get your car repaired, rather many insurance companies may even declare your vehicle a total loss in case of minor cosmetic damage. Also, certain add-ons like a zero depreciation plan will not suit your old vehicle, and it will only bring up unnecessary costs. So be a smart buyer and scout around with different car insurance companies to see which one has to offer the best deal for your old vehicle.
4. Remember you No Claim Bonus
Did you know that each year, when you do not make a car insurance claim, you add up no claim bonus on your insurance record? It is usually calculated in percentage, and you can accumulate a maximum of 50% NCB depending on the insurance provider. Now, this bonus can be claimed on your next renewal, and you can even use the NCB when you are purchasing a new vehicle, to cut down insurance premiums. Most of the insurance agents will not tell you that the no claim bonus is attached to the person who has bought the insurance and not the vehicle, so you can very well carry over the accumulated no claim bonus while buying a new vehicle. Imagine buying a very expensive car, which has a six-digit insurance premium and shaving 50% off it.
5. Think big
That’s right, think big when you want to make a car insurance claim. If your vehicle has received minor or little damage, do not go for an insurance claim blindly. Surely with things like zero depreciation add-on and cashless transactions, you think you would be better off claiming the insurance. But look at the bigger picture, you will be losing your no claim bonus and also tarnishing your insurance record. Imagine losing 50% worth of NCB over a minor repair job of a few thousand. Also increasing deductibles can reduce your insurance premiums. A deductible is the out of the pocket amount paid by the policyholder while making a claim, and it can significantly reduce your insurance premium in the future.
On how to reduce the car insurance premiums, all things boil down to a single point, be vigilant and an informed insurance buyer. These days, with a plethora of websites, you can equip yourself well before getting a car insurance policy, and you can see through tactics that most of the insurance agents play with you. Buying car insurance online is a popular choice these days, and it can save a lot of headaches. Be patient, take your time and do your homework properly before going ahead with the purchase. Also, always remember that cheap is not always good, and stay away from the deals that are too good to be true.