EMIs and premiums constitute a big part of adult life — home loan premiums, health insurance premiums, car loan EMIs and sometimes even phone premiums. Some premiums can be avoidable — if you plan ahead and discipline your spending — but not all. For example, car insurance premiums cannot be avoided because it is obligatory.
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Everyone is well aware that having car insurance is mandatory if you are using a car. Any car found plying on the roads without valid car insurance will face severe penalties. If you are ever caught driving your vehicle without your insurance papers in place, you would have to pay a fine of ₹2000, and if you are found to be a repeat offender, you could pay a fine of ₹4000, have your license cancelled and even be imprisoned.
However, car insurance should not be seen as a burden but as a layer of protection. Anyone who drives a car on the roads in India knows that the condition of the road is not always the best. Many people and vehicles are on the roads at any given time, and potholes and constructions always pave the way. One has to be very careful to avoid mishaps, but if it happens anyway, only car insurance can save you from a world of liabilities.
So, if you are planning to get a car, you must get a car insurance policy. And if you have one already, make sure you renew before it lapses. For buying a new policy, there are some measures you can take to reduce car insurance premiums. And if you wish to know how to do this, keep reading.
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Ways to Reduce Premiums During Car Insurance Renewal
Below are some of the most effective and simple ways to reduce your car insurance premiums during renewal. Take a careful look at them to ensure you get the best deal for yourself.
Did you know that NCB is tied to the insured person and not the vehicle? Not many people know that the NCB that accumulates for claim-free periods is always to the policyholder’s advantage. In addition, the NCB increases with each year you have not made a claim, and you can get a discount of up to 50% if you have not claimed in 5 years or more. And if you purchase a new vehicle after selling the old one, it is transferable because it is credited to you, not your vehicle. However, never forget to request NCB papers for your car from the insurance provider. This will give you a discount on the premium when renewing a car insurance policy.
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It is known as voluntary deductibles if you decide to provide coverage for yourself as part of your insurance policy. Your optional deductible limit reduces the insurance provider’s claim liability. As a result, the insurer allows a premium discount. So by choosing a higher voluntarily deductible, you can reduce the cost of your renewal premium. However, take note that the amount receivable in case of a claim will decrease as a result of this.
- Renew Your Policy in Time
Do not wait for the last possible moment for your car insurance renewal. Always be aware of when your insurance is set to expire. After you have crossed your expiration date, some insurance companies offer a buffer term of a specific number of days. However, if you apply to renew the car policy after it has already lapsed, you can lose out on the possibility of earning an NCB or other advantages that you would have received if you had done so earlier.
- Insured Declared Value (IDV)
The insurance provider’s Insured Declared Value (IDV) for your vehicle will continue to decrease by 10% with each renewal. The IDV, in effect, is the sum that the insurer will cover if your vehicle is stolen or completely damaged.
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However, most of us desire a high IDV, which affects the cost of the car insurance plan. Higher IDV means a higher premium, but a lower IDV means a lower premium and lower insurance payout at the time of claims. Therefore, the right IDV for your car can affect the payout you receive in the event of theft or total loss, so you must be careful while selecting the value during renewal.
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- Check for Different Policies
Numerous car insurance plans are available — third party car insurance, standalone own damage cover, and comprehensive car insurance — each with a distinct premium cost and limit of coverage. Price comparisons are necessary to find the best premium rate and reduce the renewal price. Go online, evaluate the several car insurance options available, and then pick the plan that offers the best insurance protection at the cheapest premium costs. It is permissible to switch car insurance plans when the current one is about to expire. So, shop for the best coverage and lowest premiums when renewing your vehicle insurance to lower the renewal cost.
Conclusion
Now that you know the different ways in which you can reduce your car insurance premiums, you should be mindful when the time for the renewal comes along. So the first thing you need to do is to be aware of your policy expiry date and then get onto the bandwagon to check for better policies or other ways in which you can reduce your policy premium.
Disclaimers:
- This article has been produced on behalf of Tata AIG
- All the people mentioned in this article are fictional, and all the examples have been incorporated as case studies. Any resemblance to a real case/person is purely coincidental and completely unintended.
