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5 Ways to Keep Your Car Insurance Cost Down

The year 2020 is going to be the defining year for the Indian automotive industry because of the transition from BS4 to BS6 emission standard. For users, it means higher purchase cost, maintenance charges, and increased car insurance premiums. And with mandatory third-party insurance for cars, the premium rates are only bound to go northwards.

However, you can still lower your car insurance cost in a few ways that allow you to take maximum benefit at the same time.

Following are the five ways through which you can keep your car insurance cost down:

1. Compare Car Insurance Online

Before buying a car insurance policy, always compare the features, benefits and premium rates offered by different insurance companies. You can either visit websites of the insurance companies or any online insurance broker or comparison websites to compare the cost of car insurance online. Further, purchasing car insurance online helps you to get cheaper premium rates than the conventional method of negotiating it from an agent. Since there is no broker in the transaction when you buy car insurance online, the insurer passes the benefit of lower cost to the customer.

If you are buying your car insurance online from the same insurer for several years, then it is also time to consider some other insurance companies. As the market is very competitive, you may get attractive discounts for your car insurance from other insurance providers and also get lower car insurance premium rates.

2. Increase Your Policy Deductibles

Increasing your policy deductible can help lower your car insurance premium rates to a greater extent. The deductible is the amount paid by the policyholder from their pockets before the insurance company makes the final settlement for the claim made.

For example, if the total claim is Rs 50,000, and the policyholder pays Rs 20,000 out of his own pocket, then the insurance company will only pay the remaining amount, i.e., Rs 30,000 in this case.

The more your deductibles are, the lesser your insurance premium will be. If your deductible is zero in case of an accident, then your car insurance policy will cost more. However, you should make sure you can pay for the deductibles comfortably rather than going beyond your financial means.

You should select for a high voluntarily deductible only under the following two circumstances:

  • If you practice safe driving habits, as it lowers the chances of an accident significantly
  • If you have a claim-free insurance policy for a few a consecutive years

3. Keeping No-Claim Bonus Intact

By not making a claim during the policy tenure, you can save 30-50% on the premium amount on the next renewal. Insurance companies reward policyholders with "No-Claim Bonus"(NCB) for each claim-free year. Not claiming consecutively for 3-5 years can result in the accumulation of up to 50% of the bonus amount.

Therefore, you should avoid making claims for small issues like a broken tail lamp or issues which can easily be fixed with the help of a local mechanic at a lesser cost. In this way, you can save more on your car insurance cost in the long run.

Car insurance is not linked to the car but the person who buys it. Hence, the policyholder can transfer the accumulated NCB points whenever he/she buys a new car in exchange for old. So, when you sell your old car for the new, always retain the policy in your name.

NCB allows insurance companies to incentivise you for practising safe driving habits.

4. Install Safety and Monitoring Devices

Installing additional safety features like an anti-theft alarm system, gear lock, steering lock, etc. can reduce your annual premium amount by up to 5%. However, the installations should be of approved make and, as per RTO regulations, to make a discount applicable.

Some insurance companies offer lower premium rates for cars, which are rated safe in the crash test by respective agencies. Car models having a weak body structure are more prone to damages, and the insurance companies will give a lesser discount on premium rates.

Also, by installing a smart drive GPS device, a newly introduced device by insurance companies to monitor the driving patterns of the policyholder, you can earn rewards points. Depending on your nature of driving, the insurer allots reward points, which can be redeemed in the next renewal.

5. Re-Evaluate Your Policy Features; Avoid Policy Lapse and Additional Fittings

Always renew your car insurance online within the due date and avoid the policy lapse, as the benefits and discounts you receive will be discontinued. You will be considered a new policyholder.

You should also re-evaluate your car insurance policy from time to time, as some riders may not be required anymore. For example, removing add-ons like rust cover, sealant protection, consumables cover, etc. will help to lower the car insurance cost. Before opting for any add-on riders, check its requirement and have only those, which are necessary.

Also, you should avoid additional aftermarket fittings, as it impacts your car insurance premium rates. Your car insurance premium is based on the IDV of the vehicle (factory version), type and age, engine cubic capacity, and geographical zone. Therefore, any fitting that is not part of the factory fitted version of the car attracts a higher premium, and your overall cost towards your car insurance premium goes up.

Conclusion

Gone are the days when you had to depend on insurance agents for buying a car insurance policy, where they dictated the terms. In the past, insurance-seekers were forced to borne expensive costs with zero flexibility to get a bargain on premium rates.

However, with the advent of the digital economy, getting car insurance has become hassle-free and quite simple. Buying car insurance online, you not only get the benefit of lower cost, but you can customise your car insurance policy as per your requirements. Therefore, saving a ton of money on car insurance premiums in the long run.

So, if you still follow the traditional method, then it is time to get rid of it and renew your car insurance online and enjoy a host of benefits.

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