Availing Third-party Liability insurance is mandatory and is designed to protect third parties. On the other hand, a Comprehensive Car Insurance policy covers Third-party Liability and protects you from financial losses in case of unfortunate events. Thus, it is generally suggested that one opts for wide insurance coverage to insure your vehicle. This does not mean that you have to pay a hefty amount to insure your car. You can play smart and achieve a balance between the price and the coverage.
The following tips will help you to reduce your insurance premium while availing a Comprehensive Car Insurance policy.
- Tip 1 – Install Anti-theft Devices
- Tip 2 – Voluntary Deductible
- Tip 3 – Claim Judiciously
- Tip 4 – Timely Policy Renewal
- Tip 5 – Choose Your Cover Wisely
- Ideal Insurance Coverage
Tip 1 – Install Anti-theft Devices
Installing anti-theft devices in your car acts as a layer of defense against theft. Insurance companies often view it as a measure that reduces the probability of the car being stolen. This is reflected in the risk profile of the car and correspondingly in the premium charged as well. Because the risk of theft is less compared to a car with no anti-theft device, the insurance premium charged will be on the lower side.
The anti-theft devices installed in your car need to be approved by Automotive Research Association of India to avail the concession. Also, members of the Western India Automobile Association are eligible for discount on their insurance premium.
Tip 2 – Voluntary Deductible
Whenever there is a loss, the insured also has to bear a certain percentage of the final claim amount. This amount is known as deductible. Deductibles are of two types, compulsory and voluntary.
For example, if there is a valid claim of Rs. 10,000, you will have to contribute Rs. 500 as compulsory deductible and the insurance company will pay you Rs. 9,500. If you choose to go for a voluntary deductible of Rs. 2,000 while purchasing the policy, then you will be charged less (percentage depending upon your voluntary deductible amount) insurance premium throughout but the insurance company will pay you Rs. 7,500 as the claim amount, as it will subtract the compulsory and voluntary deductible.
Therefore, people who drive safe and feel that their exposure to risk is minimal, can opt for a higher voluntary deductible to reduce the premium amount.
Tip 3 – Claim Judiciously
Those who do not make a claim during a policy year are rewarded with a No Claim Bonus (NCB) which results in a discount on the premium amount. This NCB is also carried forward to the next policy year if it is not availed during the current policy year. It plays a major role in reducing your premium amount. It is important to know that if you make a claim, you lose your NCB.
Thus, one needs to claim judiciously, and it is suggested to avoid making claims for minor losses. If you claim insurance for insignificant losses, you will miss your NCB and pay a comparatively higher premium amount in the long run.
Tip 4 – Timely Policy Renewal
If your policy is not renewed in a timely manner, you can lose your NCB. Also, renewal of car insurance policy after its expiry date might warrant a car inspection. These two instances will increase your car insurance premium as the insurance company will consider it as a new policy.
Tip 5 – Choose Your Cover Wisely
Add-ons are meant to provide additional protection and widen your insurance coverage. However, they also increase your insurance premium. While strengthening your Comprehensive Car Insurance policy with Add-ons, make sure to opt for only those Add-ons that you really need. For example, if you drive alone on most occasions, availing a Personal Accident (PA) Cover for passengers might not be an ideal option for you.
Ideal Insurance Coverage
The idea behind purchasing a Comprehensive Car Insurance policy is to widen your insurance coverage. It is productive to look out for ways to reduce your insurance premium but it shouldn’t be done by compromising on your insurance coverage. Choose your insurance cover prudently to reduce the insurance premium.