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Save Money on Car Insurance Premiums: Trim the Bill!

Meeta Sabnis Meeta Sabnis 21 April 2016
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Buying a car insurance has become as easy as pie! To add icing on the cake, we give you some well-tried ways to save money on car insurance premium.

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We know you’re in a tight spot. We’ve seen you hunting for a good car insurance renewal plan for your precious car. In fact, we couldn’t help spotting that gleam on your face when your car dealer offered you the insurance as well. While we were expected you to do a little groundwork, we felt let down when you signed on the dotted line. Now that a year has passed, we’re here to tell you the best hacks to save up on car insurance premiums. Ready for it? Take a look!

1. Choose the right Insured Declared Value (IDV)

You may be aware that IDV is the maximum value of your car decided by the insurance company. This gets compensated to you in case your car is stolen or damaged totally beyond repairs during an accident.

But guess what?

You may not be aware that the IDV also has a direct impact on your car insurance premium.

Higher the IDV, higher the premium!

Hence, it is sensible to decide on a realistic market value of your car and accordingly save on the premium.

REMEMBER! Do not opt for a very low IDV as that will adversely affect your claims and you will be compensated lesser than the real worth of your car.

2. Avoid claims – Get the NCB Discount

Haven’t claimed your car insurance policy in any given year?

Well it just goes to show your driving skills! This will result in a bonanza where you get to reap the benefit of No Claim Bonus. You are rewarded in the form of NCB discount while renewing your car insurance policy. For every claim-free year, you earn a certain percentile discount on your car insurance.

This comes in the form of a reduction of up to 50% in your own damage premium in the subsequent year.

Check out the NCB table below:

Claim Free YearBonus (%)
1 Year20%
2 Years25%
3 Years35%
4 Years45%
5 Years50%

3. Install ARAI Approved Devices

If your car is installed with some superior safety mechanism, then the chances of theft are curtailed.

So, if you plan to fix an anti-theft mechanism in your car, get the same approved by ARAI (Automotive Research Association of India). Doing that gets you an additional discount as much as 2.5 percent discount. This works up to a maximum of Rs. 500 on your own damage premium.

4. Be a member of Automobile Associations of India

Are you a member of any recognized auto-mobile association?

You are in for some pleasant surprise! Your membership could entitle you to some discount on your car insurance premiums. However, this is purely at the discretion of the insurance company.

There are four main automobile associations in India. You can earn a discount up to Rs. 500 on premium if you have a membership with them. These associations are:

• Automobile Association of Upper India
• Western India Automobile Association
• Automobile Association of Eastern India
• Automobile Association of Southern India

All you have to do is submit the membership details at the time of buying the insurance policy.

5. Check for Occasion Based Discount

Did you know that certain occupations are marked by IRDA for availing the discounts on their car insurance policy? Teachers, government employees, military personnel, chartered accountants, among others, come under this category.

A proof for the same might be required if you opt for this.

For Example: A doctor or a CA can get 5% more discount on premiums because of the profession they are into. How and why?

It’s because they are considered stable, careful and mature. This gives the insurer surety that they will demonstrate these qualities while driving

6. Increase your Voluntary Deductible

Heard of something called ‘Voluntary Deductible’?

Insurers offer you a discount on your vehicle premium if you bear a certain amount of loss associated with each claim. As a car owner, in advance you agree to pay partially towards a claim. While the rest if paid by the insurance company.

The higher you pay the ‘Voluntary Deductible’, the lower is your premium.

Just ensure that the discount amount on the premium is higher than the voluntary amount you are paying. You don’t want to be at loss, right?

7. Get a less expensive car

You do know that discounts vary according to the type of car. Every insurer fixes a certain premium price for a car based on its past claim experience.

Each type and model of car has its own claim history. Some cars are more likely to be claim-prone than other models. This is because of the structure, technical specifications, etc.

Furthermore, high-end luxury cars also attract prohibitive repair costs. This too is considered by the insurer while deciding on their premiums.

Hence, think wisely before buying a car!

8. Your location make a difference too

Most insurers are now taking into consideration the city where the vehicle is registered or will be driven!

Claims based on location is investigated and the premium is thus calculated accordingly.

For instance:

Individuals living in safer areas or residential neighborhoods would benefit with lower premiums. In a way, your residential location or work zone does make a difference and can help you save up on premiums.

We hope these tactics do help you in saving up! If you still need advice on earning car insurance discounts, call our Coverfox experts.

We’re always there for you! You will be on safer grounds, you know!

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Meeta Sabnis
Written by Meeta Sabnis
Her mantra in life is to dream, and dream until you turn them into reality. A neurotic Kajol fan, Meeta loves spending time with her gorgeous twins, ensuring a childhood they’ll be proud of. Bargain hunting, crazy dancing and romancing alphabets are some of her other cravings. She’s currently a Content Writer at Coverfox.