Reduce Car Insurance Premium

By following the below mentioned tips, you can reduce your car insurance premium and prevent a pocket burn.

Compare All the Insurance Plans

The most basic tip when buying car insurance is to compare all the available options. You must compare the insurance plans offered by different companies and understand what each one is offering against the premium. Online platforms are an excellent way to have all the plans in front of you for a better comparison.

Install Safety Devices in Your Car

The premium component of a car insurance depends on the liability of the insurance company. The higher the liability, the higher is the premium. Installing anti-theft devices to enhance your vehicle’s safety can reduce the liability of the insurance company.

You may consider installing an anti-theft alarm, steering lock, gear lock, etc. These devices help to lower car insurance rates.

Opt for Higher Voluntary Deductibles

Most of the car insurance comes with a voluntary deductible component. The deductible component is the share of the claim amount which the insured agrees to pay in case there is any damage to the car. Since the insured agrees to share the claim amount, it reduces the insurance company’s liability.

Therefore, the insurance company agrees to offer a lower premium. One must remember that the higher the share of voluntary deductibles, the lower the premium will become. However, it is essential to opt for a deductible amount that one can afford.

Do Not Make Small Claims

It is wiser to avoid making petty claims for a small dent or scratch on the car. Petty damages do not cost a lot and filing a claim for these may not be the best idea. If you are wondering why? Let us explain.

When you do not raise a claim in a policy year, the company provides you with a “No Claim Bonus” benefit on your next policy renewal. It can reduce your insurance premium by up to 50%, resulting in considerable savings.

Avoid Any Unnecessary Add-Ons

Add-ons provide additional benefits and enhance insurance coverage. However, they come at an extra cost, which may increase the insurance premiums. While including add-ons can be tempting, it is wiser to choose them based on your necessity. This way, you can reduce the insurance premium to a certain extent.

Ensure Timely Renewal of Your Policy

Another simple step to reduce car insurance premiums is to renew the policy in time. Confused about how this helps? Let us explain. If you forget to renew the policy on time, you may have to start a policy from scratch.

Insurance companies may increase the premium for renewing a lapsed policy. It may also cause you to lose the NCB, which will not be applicable to the next year’s premium.

Avoid Unnecessary Modifications to the Vehicle

Modifying the car may add to its appearance and features. However, one must remember that modifications also increase the value of the vehicle, which requires enhanced coverage.

As the insurance coverage widens, the insurance premium also goes up. Therefore, if you wish to reduce your car insurance premium, avoid unnecessary and expensive modifications.

Opt for Third-Party Insurance for Old Cars

You can choose a third-party insurance or comprehensive insurance for your car. A third-party insurance is less expensive as it only offers coverage against third-party liability.

On the contrary, comprehensive insurance offers a wider coverage, which results in higher premiums. Therefore, if you have an older car, you may opt for a third-party insurance only which can reduce the overall premium.

Benefit from Automobile Associations

Joining automobile associations is also a way to reduce car insurance premiums. When you join the Automobile Association of India (AAI) or Western India Automobile Association (WIAA), you may receive membership benefits in the form of discounts on insurance premiums.

Transfer the No Claim Bonus

The NCB is linked to the insured and not the car. Hence, if you decide to buy an insurance policy from another insurance provider, you can transfer the NCB benefit to the new insurance company. You can ask your insurance provider for an NCB transfer certificate, which you can submit to the new provider to get a discount on the insurance premium.

An insurance company considers several factors when determining the car insurance premium. Some of the factors are as follows:

Car Model, Make and Variant

The insurance premium for cars depends on the make and model of the vehicle. For example, a sedan owner will pay a higher premium than an owner of a hatchback car. The engine capacity, tyres, manufacturers, etc., impact the insurance premium.

Age of the Vehicle

The age of the car helps determine the IDV and depreciation of the vehicle. Both these factors play a crucial role at the time of claim settlement. An older car will have more depreciation which reduces the IDV. Therefore, the insurance premium will be less.

Geographic Location

Car insurance costs more in a metro city than in a tier 3 city, as a car in a metro city is more prone to damage and accidents.

** Deductibles**

Deductibles are a predetermined amount that a policyholder agrees to bear as part of the claim. Thus, the insurance company’s liability reduces, resulting in a lower premium.

Driving Record

A car insurance premium is also affected by the driver’s driving record. An insurance company considers a driver safe when he has lesser fines and penalties. Thus, if a person has a clean driving record, he is likely to pay a lesser premium.

Claim Frequency

When a policyholder does not make any claim in a policy year, the insurance company awards a no-claim bonus. The NCB award reduces the premium for the next policy year, which benefits the policyholder.

Car insurance with high premiums can affect your finances. However, by following the tips to lower car insurance, you can save a considerable amount. You can opt for higher deductibles, avoid unnecessary add-ons, renew the policy on time, etc., as mentioned above.

You must also ensure to choose an insurance provider with a high reputation in the industry, such as Tata AIG. Our insurance policies are affordable and offer plenty of benefits. Buying a car insurance policy from us provides you with lower premiums, claim assistance, a cashless repair facility, own damage cover, NCB and so on.

At Tata AIG, customer convenience is our top priority. To add to your convenience, we provide a car insurance premium calculator, which gives you a premium quote for your vehicle. It helps you make an informed decision and saves your precious time.

We shall be delighted to tell you more about our car insurance on our official webpage!