Summary
If you are a car owner, as per law, you must have at least a valid third-party car insurance policy every time you are on the road. If you plan to purchase a new policy or renew the existing ones, the following tips can help you get your policy at a lower premium.
In 2019, after the IRDAI (Insurance Regulatory and Development Authority of India) increased the premium rate for the third-party motor insurance, the insurance companies in India increased the car insurance premium by 25 to 40% depending on the car's CC (cubic capacity).
Although the IRDA sets the premium for third-party car insurance policies, there are several ways to lower your premium amount. Here are five simple yet effective tips.
Buy Insurance Online
One of the most definitive ways to save money on car insurance purchase is to buy a policy online; it gives you dual savings.
You can easily compare the different plans offered by different insurance companies and choose the best plan with maximum coverage at an affordable price. When you buy a car insurance online, there is minimal operation cost involved for the insurers, and they transfer the savings to the customers in terms of affordable premiums.
Avoid buying a policy offered by the dealer
Often, first-time car insurance buyers tend to purchase a policy suggested by the car dealer. However, such policies may not be ideal for you. The car dealers generally have collaborations with insurance companies, and they try to sell the policy to earn commission or rewards per sale.
The dealers also tend to push the car buyers to buy additional add-ons on the pretext of helping you get extra protection. But, such add-ons would increase your premium amount. For example, if you are going to drive the car alone, you would not need a passenger cover rider.
So, it is advisable to avoid buying car insurance from the dealer. Do your research well about the different plans, choose the one that suits your needs, and have an affordable premium.
Install safety devices
Installing anti-theft and high-security devices like gear lock, steering lock in your car not only acts as a precautionary measure against theft and total loss but also helps you get insurance at a lower premium.
However, make sure that the security device you install is approved by the Automotive Research Association of India.
Opt for a higher deductible
When you buy car insurance, the insurers give you the flexibility to choose the deductible percentage. It is essentially the amount you pay from your pocket when you file a claim. However, you must be careful about choosing the deductible amount.
It should not be too low or too high. When you choose a higher deductible, the premium will be lower, but you must pay a significant part of the repair expense from your pocket during a claim. If the deductible is too low, the premium will be higher.
Avoid making small claims
While car insurance's primary purpose is to get compensation for the repair expenses, when you make multiple claims in a year, you will lose out on the NCB benefits.
The cost for smaller repairs like fixing a broken tail light or repairing a minor dent will be comparatively less than the NCB amount.
When you renew the policy, you can redeem the accumulated NCB and reduce the premium cost and get valuable savings.
Final Word
Thus, there is more than one way to save money on car insurance.
Disclaimer: No Asian Age journalist was involved in creating this content. The group also takes no responsibility for this content.
