Is car insurance premium eating away a significant portion of your savings? It could be because you might be unaware of the tricks and tips to reduce your insurance premium legally.
Carefully planning before buying your insurance policy can save you a lot in the long run. So here are 10 ways in which you can reduce your car insurance premium.
- Buy the policy online: Always buy the car insurance policy online as opposed to buying it from an agent or from a physical office. Purchasing a policy online gives you more options to choose from, hassle-free process and more affordable. Many companies also offer exclusive online discounts and other perks. With an agent, you will have to pay for the agent’s fees along with the insurance policy amount, whereas the documentation process while buying a policy from the insurance company office would be too much back and forth hassle.
- Choose the right IDV: Insured Declared value plays an essential role in the premium amount. If you set your IDV high, the premium you will have to pay will also be high. But do not choose a very low IDV as this can backfire when you file a claim. The right practice is to keep the IDV as the current market value of the car. The market value of the vehicle is calculated by deducting the depreciation costs on your car, which in turn depends on the age of the car. Do not opt for unnecessary add-ons that could increase the premium but will not help you with the claim amount. For example, getting a zero depreciation cover for a vehicle aged above 5 years is pointless. Your call will not be eligible for the zero depreciation cover.
- Opt for long term coverage: Buying things in bulk always garner discounts. When you buy an insurance policy for a longer term, you will get more discount as opposed to renewing your policy every year. This way, you will also not have to remember to renew the insurance policy every year.
- Don’t claim for small issues: Avoid claiming your insurance policy for minor scratches and bents. Only file a claim when your car is damaged to a considerable extent, if not totally. When you submit a claim for silly reasons, you will lose you No Claim Bonus, which otherwise will manifest as a bonus in the next premium you have to pay or in the IDV amount. This will be more helpful to you financially than claiming for small reasons.
- Compare car insurance with multiple insurance companies: Shop for your insurance policy with multiple insurance companies before locking in on one single policy. Do not straightaway buy the first policy that you see. Insurance, being a competitive field, provides a lot of many choices when it comes to car insurance policies. The premium too varies from insurer to insurer. You might even be able to get a cheaper policy with the same benefits with various insurance companies. So, compare car insurance policies online before buying one.
- Install Anti-theft devices: Installing anti-theft devices in your vehicle will put in the good books of your insurer. This means you are equally serious and responsible about keeping your car safe and not looking to rip off your insurer. This good behaviour can prompt your insurer to reward you with discounts and other perks.
- Higher deductibles: You can opt for voluntary deductibles wherein you will pay a portion of the claim amount from your own pockets, thereby reducing the dependency on your insurer. But be careful not to go overboard with this. Carefully plan how much you will be able to afford if your car is damaged and opt for the deductible accordingly. Don’t forget to seriously consider your driving skills as well when opting for voluntary deductibles.
- Don’t modify your car: Curb the tendency to modify your car with luxurious alloy wheels, spoilers and other expensive gadgets. More luxury could lead to a higher premium. It is also mandatory to let your insurer know about it. Otherwise, the company has the right to invalidate your claim.
- Stay loyal to the same insurance company: Renewing the insurance policy with the same company will create a sense of loyalty among both parties. This behaviour will be rewarded with discounts. You can also opt to buy multiple insurance policies such as bike insurance, health insurance etc. with the same insurer.
- Always renew on time – Never forget to renew the policy on time. Not only will you lose your NCB bonus, but you will also have to pay a higher premium when you buy the policy next time. A break in your insurance renewal will prompt the companies to notch-up the premium amount. They might also ask you to submit the vehicle for inspection.