Insurance premium forms part of recurring expenses and can result in a sizeable outgo every year. By making use of the following tools, you can reduce the insurance outgo while ensuring the safety of your car and peace of mind for yourself and you family.
Opting for Deductibles
Insurance companies allow their customers to share the risk of loss / damage to the vehicle. This is generally done through the 'deductibles' component in the policy clause. Deductible denotes a fixed amount or percentage of claim that needs to be paid for by the insured. To cite an example, a deductible of Rs 2,000 would mean that the insurance company will make the payment on any claim arising on the policy after deducting Rs 2,000 from the claim amount. There are two types of deductibles - Compulsory & Voluntary.
Compulsory Deductible means you need to pay that particular amount as decided in case of damage to your vehicle while the balance will be paid by the insurer. Voluntary deductible is an additional deductible opted voluntarily by the insured. Insurance companies tend to offer additional discount on the premium amount, if Voluntary deductible is opted for.
Purchasing / Renewing Insurance Online
Apart from saving time, you can save money on your car insurance premium by buying / renewing the insurance policy online. Most insurers offer attractive rates for customers buying the policy directly from the company’s Web site. Before buying the policy, you can demand instant quotes and comparisons thereby choosing a policy that fits your budget and meets your requirements.
Preserving your car’s No Claim Bonus
No Claim Bonus is the amount of discount applied to the insurance premium for the subsequent years till the time no claim is registered on the vehicle. It keeps increasing for every year of no claim. The no claim bonus helps you not only pay lower premiums on your existing car but you can transfer the benefit to your new car in the future, thereby, leading to substantial savings in the premium amount. As such, it is important that you preserve the no claim bonus for long term benefits.
Installation of Anti-theft devices
Insurance companies vouch for installing anti-theft devices, which can be a crucial aid during times when your vehicle is stolen. As an added incentive, installation of such devices in your car can help you get a discount on the insurance premium. Some car manufacturers are already providing pre-fixed anti-theft devices in new vehicles or one can buy them in the local market.
Automobile Association Membership Discounts
Active members of various automobile associations in India, for example, Western India Automobile Association (WIAA), which are empowered under the Motor Vehicle Act and Rules, can get special discounts on their car insurance premium. These associations also organise courses on Road Safety and Advance Driving which act as added benefits for their members.
Declaring your vehicles IDV
Insured Declared Value, is the market value of your car, based on its usage, year of manufacture and so on. An individual who prefers to reduce his motor insurance premium can declare a lower value of his car as compared to declaring a higher value for his vehicle. However, you should keep in mind that this will lead to lower compensation from the insurer in case of damage/ loss of vehicle.