In India, a valid third-party motor insurance policy is mandatory for every car owner. It protects him/her against third-party liabilities, which may happen if an accident causes bodily harm or property damages to an unknown third party. However, a standalone third-party policy does not cover the policyholder against the losses sustained by his/her own vehicle.
That is why a comprehensive car insurance policy is highly recommended. Such a policy protects the policyholder against the mandatory third-party liabilities and secures his/her vehicle from theft and damages caused due to any natural or man-made calamity. However, these policies cost higher than standalone third-party plans and hence, many car owners refrain from buying them.
Car insurance rates for comprehensive policies depend on several factors, such as the make and model of the car, IDV, deductibles chosen, and the add-on covers. Apart from these factors, the driving behaviour of the policyholder can also affect his/her car insurance price.
Insurers may use telematics devices to collect granular data about the driving patterns of their customers, which help them determine premiums for usage-based motor insurance policies. Premiums for those who drive riskily or in risk-prone areas are hiked. In comparison, good drivers may be rewarded with lower car insurance rates.
Below are some smart driving tips that can help you lower your car insurance premiums:
1. Take your car out only if it is necessary
Usage-based insurance policies are sensitive to the car's usage; hence, its premium amount depends largely on the actual distance you cover with your car. It also considers the number of times you take your car out for a drive during a year. The telematics devices fitted in the car can record all these data for the insurer.
The lesser you drive your car, the lower your car insurance premiums would be. Therefore, if you want to save big on your car insurance premium, you should take your vehicle out only if it's necessary. For other days, you can use public transportation facilities or hire a cab for yourself.
2. Follow all traffic rules while driving
You must follow all traffic rules while you are behind the steering wheel of your car. Incidents of repeated traffic violations get recorded in insurer's records, and they may demand a higher premium from such users at the time of policy renewal.
When you jump a signal, violate the centre line, or drive at speeds above the permissible limit, it automatically gets recorded with the insurer with the help of telematic devices. Hence, it's essential to follow all traffic rules while driving. It will save you from paying hefty traffic fines and may help you reduce your car insurance price.
3. Avoid driving on highways
The location at which you drive and the distance you cover daily also play a significant role in determining the premium amount of your usage-based car insurance policy. Highways are considered accident-prone areas by the insurers, and hence, their risk increases if a customer regularly drives on highways. As a result, they may demand higher premiums for issuing car insurance policy to such customers.
On the other hand, driving only within the city involves lesser risks. The chances of accident or mishaps also reduce considerably. Hence, it's advisable to avoid taking your car on highways. If you need to move out of your city, you can consider hiring a rental car. It will allow you a comfortable journey and help you lower your car insurance premium too.
4. Be a safe and responsible driver
Sometimes, you may not break any traffic rules but can be considered an unsafe driver by the insurer. For instance, if you accelerate rapidly and then apply hard brakes when you need to halt or slow down, your insurer notices these patterns with the telematics device's help and starts considering you as a dangerous driver. As a result, your car insurance price goes up.
Hence, it's vital to become a safe and responsible driver. Drive as slowly as you can to don't have to apply hard brakes every time you need to stop or reduce your speed. Also, avoid taking a turn or cornering at high speeds. Such driving behaviours are considered unsafe by the insurers.
5. Limit driving during the night
The time of the day during which you drive your car also impacts your car insurance premiums. Night-time is considered risky by the insurers, and hence, if you frequently drive your car after the sunset, you may have to pay higher car insurance rates.
While it's not possible to avoid driving during the night at all, what you can do is limit taking your car out after the sun settles down. When you move out of your house, try to plan your schedule in such a manner that allows you to come back home before it's late at night.
To conclude
After getting a go-ahead from the Insurance Regulatory and Development Authority of India (IRDAI), many insurance companies in India, have started offering usage-based car insurance policies. This allows them to offer low car insurance rates to those who drive safely and exhibits responsible driving behaviour.
In future, the use of telematics by insurance companies could become much more prominent. Hence, if you do not want to pay unreasonably high premiums for your car insurance policy, start adopting safe driving habits and limit the usage of your car unless it's necessary.