What Affects a Car Insurance Premium?
- Insured Declared Value (IDV): The higher the IDV, the higher the premium.
- Age of the Vehicle: New vehicles have higher premiums due to less/no depreciation.
- Make, Model & Variant: The insurance premium varies depending on the make, model, engine capacity and fuel type.
- Geographical Location: Areas with higher accidental rates, theft risks or natural disasters may have higher premiums.
- Type of Coverage: A comprehensive policy typically commands a higher premium than a third-party-only policy.
- Add-On Covers: Additional covers like engine protection, zero depreciation, personal/passenger accident coverage, and roadside assistance increase the overall premium.
- Modifications: Non-factory/aftermarket modifications like performance upgrades, CNG/LPG fitment, or cosmetic enhancements can increase your car's premium.
- Anti-Theft Devices: Vehicles equipped with anti-theft or GPS devices typically have lower insurance premiums.
- Previous Claim History: Insurer provides a no-claim bonus of up to 50% for a claim-free year. However, frequent claims can lead to a higher premium.
Tips to Save Money on Your Car Insurance
Car insurance is a legal requirement, but that doesn’t mean you have to overpay for it. With the right approach, you can enjoy comprehensive coverage while keeping your premiums affordable.
Here are some practical tips to help you save money without compromising on coverage.
Shop Online and Compare Policies
With the help of various online platforms like PolicyBazaar and Coverfox, you can easily compare car insurance from multiple insurers based on policy benefits, features and premiums and get the best deal for you.
Furthermore, buying an insurance policy online enables you to experience hassle-free processes with competitive discounts, shorter turnaround time and paperless procedures.
Opt for No Claim Bonus (NCB)
The insurer provides a no-claim bonus on your new insurance policy if you haven't claimed the previous policy term. This reward starts at 20% for a one-claim-free year and increases to 50%. Interestingly, the NCB is transferable, as it is linked to the policyholder, not the vehicle. So, you can transfer it to a new car under your name.
Buy a Bundle Package
Bundling policies under one insurance company often comes with loyalty perks and high discounts. If you have multiple vehicles or an existing health, life, or home insurance plan, check if your insurer offers a multi-policy discount.
Renew Insurance on Time
Policy lapse can lead to higher premiums when renewing or purchasing a new policy, as this gap is often considered a sign of financial instability or negligence. This may also lead to a lapse of your no-claim bonus.
Skip Claims for Minor Repairs
Filing too many claims can increase your premium, as insurers view this as a risk and may adjust the premium accordingly. To save money, it is advisable to avoid claiming for minor repairs.
Avoid Unnecessary Add-Ons
While add-ons like zero depreciation, roadside assistance, and engine protection can enhance your coverage, they also increase the overall premium. Not every add-on is beneficial for everyone. So, customise your plan according to your needs, as more add-ons would result in a higher premium.
Invest In Security Devices
Insurance companies often provide a small but meaningful discount to those who install certified anti-theft devices, such as GPS tracking systems, dashcams, gear locks, and steering locks, as they decrease the risk of vehicle theft.
Wrapping Up
Buying car insurance is essential and a legal requirement. By following the tips mentioned above and making wise decisions, you can lower your car insurance premium without compromising on your policy benefits. Remember, the goal is to find the right policy for you, where cost meets confidence.
FAQs
1. How can I save on car insurance?
The best way to save on your car insurance premium is by comparing policies online, maintaining a good driving record, avoiding unnecessary add-ons, and taking a bundle package.
2. Is it worth taking zero depreciation cover?
If your car is less than 5 years old, the zero depreciation cover will provide you with the full cover amount without depreciation deductions.
3. What if I miss renewing my insurance policy on time?
If you fail to renew your car insurance, your policy will lapse, and you may lose your accumulated no-claim bonus. This will also increase the premium, and the insurer might require vehicle inspection before issuing a new policy.
