While you may save on cost by not insuring yourself for your health and life, you cannot do without insuring your car. It is one insurance that you have to mandatory go with. Even before your car is out of the showroom it should be insured as per law for third party cover. Car manufacturers woo buyers by giving them free insurance. But you must remember that there is a catch here as it is applicable only for a year. For the rest of the years, you have to bear the cost on your own in the form of renewals. Considering it is necessary evil, can you control the car insurance bill? The good news is you can. Here is how you can save on your car insurance’s premium.
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While some deductible amount is already there in the policy which you have to bear from your own pocket before insurer makes you the claim, you can also opt for voluntarily deductible to reduce the premium amount. Suppose the mandatory deductible is Rs 500. Now if you opt for a voluntary deductible of Rs 2,500 it would give you around 20% discount on your premium. In case of an accident occurs, you will have to fork out a total of Rs 3,000 of the claim amount (voluntary deductible of Rs 2,500 plus the compulsory deductible of Rs 500). According to experts, this would work well for all those who are confident of their driving ability.
Nowadays online is the way to go. Online insurance covers are 5-7% cheaper. This is because of the simple fact that there are lower transaction costs involved. There is no commission involved and the benefit of the lower cost is passed on to the customers in the form of lower premium rates. If you want to renew the policy you can look at multiple insurers through aggregators like policy bazaar, click2insure and insurance mall. They can get you quote from different insurers under one roof. You can compare the price and the features and select the most appropriate policy for yourself.
Making most of NCB
The premium amount also depends on your claim history. If you haven’t made any claim in the previous years, then you get a benefit from the insurance company in the form of a no-claim bonus(NCB). This refers to the discount policyholders are entitled to if they have not made claims in the previous policy years. It is given at the renewal of the policy. The bonuses keep getting accumulated over the years resulting in lowering your premium. For instance, Bajaj Allianz insurance websites states that it provides 20 per cent no claim for not making claim in first years, 25 per cent for two, and 35 per cent for three previous claim free years. This goes up to 50 per cent for the 5 free claim free years. So essentially it ranges between 20 and 50 per cent. The good news for you is that you can transfer no claim bonus to your new car. Yes, it is transferrable. Actually, the bonus follows the driver. It usually remains valid for 90 days from the date of expiry of the policy. In some cases the no claim bonus also remains valid even if you change the insurer and not the car per se.
Expert say in order to accumulate bonuses you should refrain from making small claims. If you make any expenses on your car which are small in nature you should forgo it, especially if the claim amount is lower than the NCB.
Insurers these days offer differential pricing and hold personal attributes important for calculating premium. Your age, marital status and profession also matters. The discount ranges from 2-12%. Similarly people who are married are perceived to be more responsible and less riskier and hence are forwarded discounts. Age does matters. For instance, if the insured is over 35, some insurers may offer him or her a discount of 5% on the premium payable for the ‘own damage’ component of the policy. For policyholders over 45, this can go up to 10%. Likewise, who are professionals like doctors, chartered accountants and teachers stand to earn a discount of 5%. They are considered more responsible.
If you are a member of the Automobile Association of India (AAI), you stand to earn discounted premiums. This discount is 5% or 200 on the own-damage premium for private cars. An anti theft device also helps you earn a discount. If you install anti-theft devices like gear and steering lock, airbags or sensors you can reduce the premium. However, these devices should be approved by the Automotive Research Association of India (ARAI), for discount. The discount ranges across insurers. ICICI Lombard provide, for instance, provide you a discount of 2.5%, subject to a maximum of Rs 500. Some cars which already have i-cat system(anti-theft) in place command a lower premium of upto 10%.
Make of the car
The type of car also has a bearing on the premium amount. If you own an Sports Utility Vehicle(SUV), the premium would go up as much as 20 per cent since they have high resale value and thieves keep an eye on it. Similarly, cars like Toyota quails, Tavera and Tata Sumo command a higher premium because they might be registered on individual’s name but are mostly used for commercial purposes by the individuals.
Apart from the make, the type of fuel you on which you run your vehicle on also affects the premium liability. The premiums are cheaper for those run on petrol. On the other hand diesel and CNG run vehicles command higher premium due to their excessive usage. If your fuel tank is made up of fibre, you can see your premium go up by 3-4%. Also a car with spare components have higher premium though they might not be costlier. On the other hand some high end models which have spare parts easily available command a lower premium.
An outstanding share! I have just forwarded this onto a colleague who had been doing a little research on this. And he actually bought me dinner because I found it for him… lol. So let me reword this…. Thank YOU for the meal!! But yeah, thanks for spending time to talk about this matter here on your website.