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Few steps to reduce your Car Insurance Premium

Posted by - Sanjay Datta, Chief - Underwriting, Reinsurance & Claims
April 18 2014
High inflation is causing a dent in our savings with each passing day. To add to that, there are other expenses that cannot be avoided. Paying for your home loan EMI, car EMI as well expenses on car maintenance, motor insurance add to the financial burden. While some expenses cannot be avoided or reduced, you can definitely reduce your car insurance premium by following some prudent practices.

Motor insurance premium is determined by several factors. By making use of the following tools, you can easily reduce your car insurance premium without comprising by buying a lower cover or a policy devoid of important benefits.

  • Purchase car insurance Online:Purchasing your insurance online would not only reduce the time required to visit your insurance company or agent, but it will also enable you to save money. To encourage customers to buy policy directly from their websites, insurance companies offer attractive deals and premium rates. Insurers also provide instant quote service on their website. Before deciding on policy purchase, you can request for instant quote for your desired policy thereby comparing and selecting a policy that meets your requirements and is suitable for your budget.
  • Opt for Deductibles: Deductible is the monetary loss borne by a vehicle owner. Deductible can be either Compulsory Deductible or Voluntary Deductible. In case of Compulsory Deductible, you are required to bear a pre-decided amount while the rest of the expense will be paid by the insurer in case of damage to your vehicle. For reducing your motor insurance premium, you can also opt for Voluntary Deductible which is an additional deductible. In this case, you voluntarily agree to pay a certain portion of the claim amount from your own pocket. In return, the insurer would offer you an additional discount on your insurance premium.
  • Avail No Claim Bonus: No Claim Bonus (NCB) is a discount applied to the insurance premium for those who have not registered claims in the previous years. NCB increases for every year of no claim starting from 10% and goes up to 50%. In addition to helping you reduce the premium on your car insurance, the NCB benefit can also be transferred to your new car, when you buy one. Given that the premium on a new car (and presumably bigger car) is much higher compared to an old car, you will be able to make substantial savings on the insurance premium of your new car.
  • Install Anti-theft devices in your vehicle: Installing anti-theft devices in your vehicle can be a proven crucial at times when your vehicle is vulnerable to theft. Vouching the importance of such device, insurance companies now encourage their customers to install anti-theft devices as a measure of precaution. Moreover, insurers offer special discount on the insurance premium for installing such devices in cars. Cars with prefixed anti-theft devices are available with your vehicle dealers or one can buy these devices separately in the local market. You can avail special discount on insurance premium if you are a member of bodies such as Automobile Association of India or Western India Automobile Association (WIAA) which are empowered under the Motor Vehicles Act.
  • Declare the correct IDV for your vehicle: Insured Declared Value (IDV) is the depreciation applied on your vehicle over the manufacturer's selling price, based on the ageing of the car. It is the maximum amount that the insurer will pay in case the vehicle is completely damaged and needs to be replaced. At times, car owners seek a higher IDV, however, it does not make sense to seek a higher than reasonable IDV since it will end up increasing the insurance premium on the car without any associated benefit.
While reducing your car insurance premium is one way to reduce your expenses on the vehicle, do remember that fuel consumption is the other major and recurrent expense. Following speed limits, avoiding sudden braking or rapid acceleration, switching off the engine at long duration signals etc. will help you reduce fuel related expenses.

So go ahead, follow these simple steps and enjoy the drive in your favorite vehicle.

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