Cars are a great convenience for daily transit and transportation in general. Owning a car provides us with a sense of independence and achievement. Ever since the popularity of midrange affordable cars, more and more Indians are ditching the previously preferred motorcycle and opting for cars as their mode of primary transport.
Although car prices have indeed reduced significantly, that does not mean owning a car has no added costs attached to them. Besides fuel and maintenance costs, vehicle insurance is the most important and compulsory thing car owners must buy.
Car Insurance can be generally grouped into “third party” insurance and comprehensive insurance. Third-party insurance, as the name suggests, covers the third party typically, meaning in case of an accident, it is used to compensate for the damages incurred by other people. In comparison, comprehensive insurance is mainly used to cover the damage to “the self”, meaning the car owner and the car itself.
We can now understand the importance of having well-thought-out vehicle insurance for our cars. The post-pandemic economy has not been kind to the insurance market, making it much more expensive for consumers, especially if we factor in the recent 40% hike in the third-party insurance premium rates. Hence, we must reduce the premium rates for new and existing car insurance policies.
Further in the article, we will discuss the different ways and tricks that can be used to reduce our car insurance premium rates significantly.
Tips to Reduce the Car Insurance Premium Rates
Compare different car insurance policies
Although it might look like a tedious process, comparing the different car insurance policies on offer is one of the most important hacks to get the best deals on car insurance premium rates. Like any other industry, the insurance industry is highly competitive, and a good comparison website can help us get cheaper rates conveniently.
For people who are car insurance renewal online their existing policies, many insurance companies offer certain perks and discounts; these can be used to lower the premium rates.
Get the “pay as you drive” insurance plan
The “pay as you drive” policy is a relatively new concept introduced in the Indian automobile industry in 2020 by the IRDAI. In this policy, the insurance company charges the insurer based on the kilometres they drive. It is a new concept and moves away from the old-time method of an insurance policy based on time duration.
People who don’t use their car daily can opt for this insurance policy to reduce their premium rates. Lesser miles equates to lower premium rates. It must also be stated that the benefits of this type of insurance policy are similar to that of the standard comprehensive policy.
Try to avoid extra add-ons
Although it is generally advised to opt for add-ons while buying a car insurance policy since the base policy is never comprehensive, in some cases, one can get a bit overboard with different unnecessary add-ons. It can significantly increase the premium rates. Hence we must only opt for those add-ons which are extremely necessary for our vehicle.
For example, we can avoid engine protection add-ons if we don’t live in a locality with a water logging issue.
Opt for the correct modifications
Modifications in terms of car insurance can be both good and bad. Improvements and cosmetic upgrades like paint jobs, body kits, etc., generally increase the premium rates for insurance companies since these modifications make the vehicle prone to theft.
Other similar modifications like increased power and acceleration and installing sporty wheels make the car more prone to accident, leading to steeper premium rates. Hence these must be avoided.
Not all modifications are bad; for example, installing anti-theft devices in the car increases the vehicle’s safety, leading to reduced premium rates.
Avoid making small claims
If during the policy period the car suffers minor scratches and bumps, one should avoid making claims for such incidents as this will make us ineligible for the “no claim bonus” during policy renewal. In essence, the “no claim bonus” is a discount offered by the insurance company if the insurer has not filed any claims during the policy term.
Opt for bigger deductibles
A deductible is the amount of money the insurer pays out of their pocket in case of a claim. In other words, it is a certain percentage of money paid by the insurer, whereas the insurance company pays the rest. Naturally, the higher the deductible amount, the lesser the premium rate.
Renew car insurance online
An online insurance policy can come in handy as in an online insurance policy; the premium is automatically deducted at the end or beginning of the month; hence there is little to no chance of policy lapses or increased premium rates. In this regard, some providers like Bajaj Allianz car insurance are good as they offer multiple policies with low premiums.
To conclude
The tips mentioned above can effectively lower the premium rates of your existing and new car insurance policies.
