Economic development and modern lifestyle have made owning a car a comfort rather than a luxury. In today’s age, a car is fast becoming a necessity if one can afford it. However let’s admit it, buying a car is not a big deal but maintaining it is. Maintaining a car questions your affordability, thanks to the rising prices of fuel! Even regular service and repairs of the car and the associated insurance cost are not cheap. While you cannot change the fuel prices and the service-related expenses of your car, you can definitely do something about your car insurance premium.
Yes, you heard me right! While a car insurance policy is a mandatory requirement (thanks to the Motor Vehicles Act), the premium rate therein can be manipulated. If we bear in mind certain factors which contribute towards the lowering of premium, we can successfully bring down our car insurance cost. So, what are such factors? Let us see:
- Being safe is being happy
While driving safe is the first rule when you own a car, there are other safety measures which can reduce your premium rate. If you install Anti-theft devices, ABS, air-bags and other safety gear in your car, you are perpetually lowering the probability and also the severity of a claim. As the premium depends on the risk and you are greatly reducing the risk, some insurance companies can offer you discounts on the own damage premium.
- Hold on to your No Claim Bonus
A No Claim Bonus, or NCB, is the insurer’s reward to you if you have not made any claim in a policy year. The NCB takes the form of a premium discount where the next year’s premium is discounted for the NCB earned in the previous year. Changing your car or porting your car insurance policy to another insurer does not make you lose your NCB. The NCB can be carried forward to a new car or a new insurance policy from another insurer, whatever is the case. So, when you buy a new car or port your policy, do not forego your previously earned NCB. It can be used to avail discount in your subsequent premiums. Amazing, isn’t it?
- Compare, my friend. Compare.
Hasn’t the online marketplace seen a rapid increase? With big discount days and amazing shopping festivals, it’s raining discounts on every product imaginable and one who compares gets the best deal, isn’t it? Why should your car insurance purchase be any different? Every insurance company has a different pricing policy and the premium for your car varies across insurers. If you buy any plan on the recommendation of your agent / friends / peer / colleague, you lose out on the comparative advantage of other available plans. Comparison between the available car insurance plans should be your mantra if you want to end up with the best plan. This comparison is not even a difficult task with a host of online web aggregators doing all the work for you. You need to furnish your car details and you would be presented with all car insurance plans and their quotes to help you compare car insurance online. These aggregators also provide you with the car insurance calculator tool which helps in estimating the premium rate for your car, by adding add-ons or customizing the IDV [or insured declared value] of your car.
- Deductibles are your friend (to some extent)
Voluntary deductibles, or simply deductibles, are that portion of the claim which you, as the policyholder, voluntarily undertake to pay from your pockets while the insurance company pays the rest. So, if you choose a limit of Rs. 5000 and the claim is Rs. 15,000, you would have to pay Rs. 5000 while the insurer would pay the remaining Rs. 10,000 [depending upon the depreciation value and other factors]. Since you are sharing a part of the claim burden, the insurer’s outgo is reduced and you are rewarded with a premium discount. Higher the deductible limit you choose, greater would be the premium discount you can avail. However, always remember to use this factor in restrain. By reducing your premium too much, you might fall on the wrong side at the time of making a claim.
A car insurance policy is necessary for your car and if you can lower the associated premium, why not? Just bear in mind the above factors which enable lower premium rates before you buy a policy. Also remember that online car insurance is your best bet. Use the car insurance calculator to work out the premium or simply compare car insurance online. Whatever you do, always resort to online car insurance purchases and renewals for getting your money’s worth.
