Well, we completely understand you are in a tight spot. We have seen you hunting for a good car insurance renewal plan for your precious car. We have also overheard you seeking the opinions and guidance from your friends and family members. And while you were flipping the pages of that auto magazine looking out for some relevant information on the same, we were helplessly watching you.
Almost a year back, when those brand new set of wheels made a grand entrance in your life, we are certain, car insurance plan was the last thing on your mind. We couldn’t help spotting that gleam on your face when your car dealer offered you the insurance as well. While we were expecting you to do a little groundwork around the insurance plan that was offered to you, we felt let down when you signed on the dotted line.
Well, now that a year has almost zoomed past, we are here, to lend a helping hand this time with everything you need to know about your car insurance policy and, moreover, to help you save on the premium.
Types of Car Insurance
Two types of car insurance plans are available:
Third Party Liability Insurance
This plan covers any loss and damage to the third party affected due to the involvement of your car. However, it does not cover any losses incurred to your own car. Third party claims are settled in Motor Accident Claims Tribunal and need an FIR to be lodged at the local police station. The compensation decided by the Tribunal to the victim is generally unlimited, and is decided on the basis various factors, including the earning capacity of the latter. Similarly, the damages to the third party property are covered up to Rs. 7,50,000 but can be limited to Rs. 6,000. While this insurance cover is mandatory under the Motor Vehicles Act, 1988, if you want to drive your car on road, we would certainly advice you to go in for a comprehensive insurance cover to protect your car as well as cover the third party loss, in the unfortunate event of a mishap on the road.
This cover is a perfect choice for all cars that are less than five years old. It not only shields you against any financial liability arising out of the involvement of third party in an accident, but also protects you and your own car against any damages, theft and natural calamities like cyclone, earthquake, fire explosion, etc.
Now that you are aware of the car insurance plans and have decided on the suitable one, let’s see how you can save some bucks on your car insurance premium assuming you have opted for a comprehensive plan.
How to Save Money on Your Car Insurance Premium?
We understand the worth of your hard earned money and that’s precisely why we would like you to save wherever possible. Below are a few ways you can benefit from and save some bucks on your insurance premium.
Choose the correct IDV (Insured Declared Value)
You may be aware that IDV is the maximum value of your car decided by the insurance company that will be compensated to you in case your car is stolen or damaged totally beyond repairs during an accident. What you may not be aware of is 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. At the same time, 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.
Another important factor not to be missed while buying car insurance is the NCB (No Claim Bonus) discount. Your cautious driving without raising any claims during the entire year is not overlooked by the insurance company. Thus 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. It starts with 20 percent for the first year and can go as high as 50 percent over the consecutive five years.
You know the secret now: Drive cautiously and avoid making minor claims that you can pay for from your own packet. The trick is to do a little math before raising any claim to weigh the repair amount against the NCB discount you would earn on your next renewal.
Installing ARAI Approved Safety Devices
If your car is installed with some superior safety mechanism, then the chances of theft are curtailed. This leads to lesser number of claims raised. Insurance companies appreciate this and offer a discount on the insurance plans to all those who have installed the anti-theft devices in their cars. The condition is that they need to be approved by the ARAI (The Automotive Research Association of India). It can fetch you as much as 2.5 percent discount up to a maximum of Rs. 500 on your own damage premium.
Membership of Automobile Associations of India
There are four main automobile associations in India on whose membership you are entitled to a further discount up to Rs. 500 on your premium. 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.
Occupation Based Discount
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.
To conclude, as a consumer, it is in your own interest to do an in-depth research to save money on your car insurance premium. And finally, to make your car insurance package more appealing and tempting, you must seek the right ingredients to assess your own needs and compare the quotes of various insurance companies. Channels like Coverfox.com can provide you a platform to compare and choose the right plan for you as per your needs.