Saving for a rainy day holds greater significance now than ever in the common man's life, given the rising cost of living. A typical individual has a number of expenses like groceries, commuting, utility bills, school fees, loan repayments, etc. To top it off, if you own a car, insurance premiums can really take a chunk out of your monthly budget.
But, here's the silver lining - you can save money on your motor insurance premiums by following some simple tips.
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Ways to Save Premiums on Your Car Insurance?
On-Time Premium Payment
You should renew your policy on time to avoid a lapse. Renewal of a policy that has already expired may result in higher premiums as insurers consider delayed payment of premiums as an additional profile risk.
What’s more , if your policy remains lapsed beyond 90 days, you may lose your accumulated No Claim Bonus. It may not be applied to the following year's premium, and hence, you’ll lose out on the discount.
Note: The No Claim Bonus is a reward given by the insurance company to you when you don't make any claim in a given year.
Compare The Policies Online
If you feel your current insurer charges you a lot, you can go online and compare the premiums from different insurers and choose an insurance policy with a reasonable premium and adequate coverage. Various online platforms allow you to compare premium rates and other benefits. Ensure that you don't compromise on the coverage below the current market value of your car (read IDV) to yield a lower premium.
Avoid Unnecessary Add-Ons
A motor insurance add-on offers additional coverage for your vehicle. You can purchase these add-ons at an extra cost, thereby increasing your premium.
So, evaluate each add-ons after considering your requirements and needs. You may not require every add-on and can lower your premium by choosing only the ones that are really necessary.
For instance, if you do not live or are not likely to drive through flood-prone areas or an area with water logging problems, an engine protector cover probably may not be of much use to you.
Opt For ‘Pay As You Drive’ Insurance
Note: This is a newly developed concept and not all insurers offer it. However, a few insurers like Edelweiss, Bajaj Allianz and Go Digit do.
'Pay as you drive' insurance is usage-based insurance that was launched in India in 2020. You pay according to how much you use your car. Make sure you are aware of all the inclusions and exclusions before purchasing the policy.
Avoid Unnecessary Modifications That May Lead To Higher Premiums
Adding any sort of features to your cars such as CNG kits or any other electrical or non-electrical accessories will increase your premiums. The insurer must be informed about any such modifications - not doing so may result in the claim being denied if the modifications cause damage to the car. Make sure you don't make any unnecessary modifications to the car, such as changing the engine, wheels, etc., because this may cause the premium to go up as well as put your car at risk.
Install Anti-Theft Devices
Car theft is a common occurrence. Installing certified anti-theft devices such as gear locks, anti-theft alarms, and steering locks approved by the Automobile Research Association of India (ARAI) and being cautious will reduce the risk of theft. And, you will also receive a discount on the premium.
Refrain From Making Small Claims
Filing a claim for minor damages like scratches, tiny dents, etc. is futile. If you file a claim during the policy year, you won’t receive the No Claim Bonus discount on your renewal premium.
When you make a claim to the insurer, they deduct a certain amount - consumables costs, deductibles, and the depreciation value of the parts of your vehicle, before paying you the claim amount. No matter how small the claim is, you will have to foot these expenses and on top, you will lose your No Claim Bonus as well. So, if your car sustains minor damage, you can repair it by paying from your pocket and save the No Claim Bonus, so you don’t have to pay a higher premium for the next renewal.
Opt For Voluntary Deductible
A Voluntary Deductible is a type of deductible that you choose to pay from your own pocket. The higher the deductible, the lower the premium.
If you know you are a safe driver, and you want to save on premiums, you can choose a higher voluntary deductible amount, and save considerable money. It goes without saying that in the event of damage, you will be paying more than customers who have not opted for the voluntary deductible.
Before choosing your Voluntary Deductible amount, consider your budget and your level of risk tolerance. If you are more prone to making claims, this option might not be a good choice for you.
Join An Automobile Association
In India, some insurance companies offer discounts on premiums to people who belong to certain automobile associations, such as the Automobile Association of India (AAI) or the Western India Automobile Association (WIAA).
Transfer Your NCB From Your Old Car To Your New One
When you sell your car and buy a brand-new one, you'll need an insurance policy for the new car and may even want to switch to another insurance provider. You can save on the new policy's premium by transferring the NCB from the old policy. By obtaining an NCB retention letter from your old insurance company, you will be able to retain the discount on your new policy.
Third-Party Insurance Recommended For Old Cars
A comprehensive motor insurance policy offers financial protection against any loss/ damage caused to your vehicle, as well as to a third-party individual or property. Purchasing comprehensive coverage for an old, unused, or likely-to-be-sold car that is not being driven often may not be beneficial - which is why it makes sense to evaluate buying a third party cover.
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The importance of having an insurance policy for your precious vehicle cannot be overstated. Getting your car insured does not have to cost a fortune. By following the above-mentioned smart tips, you'll be able to protect your vehicle adequately while saving on insurance premiums.