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ICICI Lombard Expert Blog

Steps to Reduce Your Car Insurance Premium

March 20 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 your home loan EMI, Car EMI & expenses on car maintenance, motor insurance adds 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 following tools you can easily reduce your car insurance premium without comprising by busing a lower cover or a policy devoid of important benefits.

Purchase 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 websites. 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 to your budget.

Opt for deductibles

Deductible is the monetary loss borne by a vehicle owner, deductible can be either compulsory or voluntary. In case of compulsory deductible, you are required to bear a pre-decided amount while the rest of the expenses 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 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 foes 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 the premium an 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 device

Installing anti-theft device in your vehicle can be proven crucial at times when your vehicle is vulnerable to theft. Vouching the importance of such device, isnruance companies now encourage their customers to install anti-theft devices as a measure of precaution. Moreover, insurers offer special discount on the premium for installing such devices in cars. Cars with a pre-fixed anti-theft devices are available with vehicle dealers or one can but 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

Insured Declared value (IDV) is the deprecation applied on your vehicle over the manufacturer's selling price, based on age of the car. It is the maximum amint that the insurer will pay in case the vehicle is completely damaged and needs to be replaced. At times car owners seek an higher IDV, however it does not make sense to seek a higher than reasonable IDV since it will end up increasing the premium on the car without any associated benefit. So go ahead, follow these simple steps and enjoy the drive in your favorite vehicle.

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