Insuring your vehicle is of key importance that one requires immediately after purchasing/renting a vehicle. By purchasing car insurance, you are basically getting financial protection against any sort of physical damage and/or bodily injury that has been a result of an accident that your vehicle has been a part of. Car insurance can be of several different types in India; Private Car Insurance and Commercial Vehicle Insurance. However, incurring expenses just to insure your car are not the only costs that you have to bear in mind. A certain fixed premium amount is charged in order to receive your car insurance. The amount of this ‘premium’ is usually determined by the Insurance companies after reviewing the level of risk. This amount may also be determined keeping in mind the model of the car, year of manufacture, fuel option, car colour, car accessories, profile of car owner, etc. However, it is very important to understand that a lower premium rate may also mean a reduced insurance cover; so it is very important to read the fine print (do your research well before hand) before you purchase your car insurance policy. While premiums are higher for cars like Tata Sumo, Chevrolet Tavera, Toyota Qualis; many entry-level cars like Maruti Aldo, Hyundai Santro, usually have lower premium rates. In fact many youngsters in the Indian market prefer using these cars. Sports-utility vehicles (SUV’s) usually have higher premium rates in northern India and can even go up to 20%.
Now that you have you have set your foot on the accelerator, here are some key precautions that you can take before you decide to buy your car insurance policy or even before you make a decision on which car you decide to purchase; which in turn will help reduce your premium rate:
1) Built in Vehicle Safety Features: If your car has safety features- such as airbags, side airbags, anti-brake system (ABS), anti-theft device, an improved alarm system, etc. it can help you save your money because by having these facilities available in your car you will reduce the chances of damage done to the car.
2) Age: Age plays a very crucial role in determining the premium rate that you have to pay. Those people who are older are deemed to be more experienced than the younger drivers who lack experience.
3) Combining policies: If you have more than one vehicle, a good way to reduce your expenses and save money is to insure all your vehicles under one policy. The premium may also go down if you have a life insurance policy from the same company.
4) Online Discounts: Many a time, insurers try to incentivise insurance customers by offering discounts to those people who buy or renew their policies online.
5) Incentives for Differentially-abled people: Many people are oblivious of the fact that those people who are disabled in any manner such as disabilities- dyslexia/dysgraphia, etc. or autistic are offered a complete 50% discount on their premiums by insurance companies.
6) No-Claim Bonus- A no-claim bonus is offered to those customers who renew their policies and who have not claimed insurance during the previous year. The discount rates start at 20% in the 2nd year and can even go up to as high as 50% in the 6 year. This means that the customer can save a minimum of Rs. 1.600 (20%) on a premium of Rs. 8.000 for a car insurance policy.
The same (No-Claim Bonus) may be transferable to a new vehicle as well if the customer decides/chooses to sell his previous vehicle. However, it is important to remember that the policy holder needs to have sold his old vehicle for a new one and also have an accumulated no-claim bonus.
Also check out what others are saying about the car insurance premium:
1) Siddharth Kumar, Investmentbazar.com
Like everything else that gets dearer by the day, car insurance premiums are also getting more and more expensive these days. There are a large number of car insurance companies in the fray who have been offering different types of insurance policies with varying premiums and facilities to lure you. Sometimes, it becomes difficult to choose the best insurance at the lowest premium.
The following tips will help you choose the right car insurance and save money in the process.
Tip 1: Compare prices
Before buying your car insurance, it is better to compare the premium rates and benefits offered by various other insurance companies. A large number of insurance companies have their websites. Plus there are many more sites where comparison of car insurance premium charged by various companies can be done under one roof. If you have been happy taking the same policy for the same car for a few years now, it is still better to try some other major car insurance companies. May be you come across companies offering still lower rates and discounts.
Tip 2: Choosing the right vehicle
Insurance companies usually charge hefty premiums for sports vehicles and fancy cars because of the increased risk involved in possible thefts and expensive repairs in case of accidents. So it is better to go for a normal car if you want to keep your insurance premium low.
2) Car Insurance Tips by Policy Bazaar
1. Compare car insurance quotes before buying. You can easily do this through an insurance aggregator like policybazaar.com. Typically you can save up to 55% on you insurance premium.
2. Compare both prices and features.
a. IDV: This is the maximum money you can get in case of total loss. To reduce your premium your agent can reduce this amount.
b. Voluntary excess: Say in case of an accident, you opt to pay for the first 5 thousand rupees. Then this amount can be reduced from your premium. But there can be a problem, if your agent does this without informing you. Which is what happens quite a bit, so watch-out.
c. No claims bonus: Please ensure you get the right no-claims bonus. In case you take more than you are entitled to, your claim if any may not be processed.
4. Your cover note: This is valid for the first 60 days, after that you must get the final policy document. If you do not receive this, you may not be insured. Please ensure your broker / agent provides you this.
5. Cashless: Do not get over excited by this. Most companies have a cashless settlement process with multiple partners in every city. A broker can guide you regarding which companies have a cashless settlement tie-up with which company, and garage.
3) How you can reduce the premium on your car insurance – By Economic Times
If you have been planning to buy a new car, you are bound to have been pulled in by the bevy of discounts and freebies. One of the most attractive among these is the offer of free insurance. Since buying a car insurance policy is compulsory, the word 'free' pulls in buyers, but there could be hidden clauses. The first catch is that the insurance provided is typically only for a year. From the second year on, it's your responsibility to renew the policy and pay the premium.
Moreover, free insurance would mean a lower discount on the price of the car as dealers invariably recover the premium through the final cost that you pay for the vehicle. Besides, the free policy may not include various types of damages, such as that by floods. So, read the fine print carefully before you take this bait, or you could opt for a higher discount on the car and buy an insurance policy separately. Find out how due diligence and research can help you reduce the insurance premium you may have to pay for the first year as well as subsequently.
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