How Can I Reduce My Car Insurance Premium?

Purchasing a car as well as availing an insurance policy for it is often considered an expensive affair. To safeguard oneself from the financial loss which one may incur due to an unfortunate event involving his/her car, a car owner needs to pay an amount on a regular basis, generally a year, in exchange for the coverage. In the case of a third party insurance policy, where coverages are only offered for third party liabilities, the premium amount appears cost-effective. But for a comprehensive policy, which offers overall protection against both third party liabilities as well as own damage incurred by the insured’s car, the premium amount is relatively higher.

However, there are some simple ways by which a policyholder can curtail the premium amount to some extent without losing any benefit. Let’s know the options.

How Can I Reduce My Car Insurance Premium?

You can reduce the premium of your car insurance policy by practicing the following:

By Comparing several insurance policies and purchasing a suitable one online

Now-a-days, when the internet comes as a blessing, visiting a shop to buy something is becoming obsolete. The same is the case for a car insurance policy. Thus, car insurance companies offer insurance plans at attractive premium rates online. Another advantage of purchasing a car insurance plan online is that the process is user-friendly and transparent.

In addition to this, online purchase of a car insurance policy allows you to compare several insurance policies in a go and choose the plan which best suits your requirements. Quite often similar plans are offered at different rates by different insurance companies, thus, when you compare them online before purchasing one, you make an informed decision and are able to fetch the best deal.

Get Correct IDV For Your Car

IDV or Insured Declared Value is the maximum insured amount set by the insurance company for your car at the time of issuing an insurance cover. IDV is the amount basis which coverage is provided to the policyholder in the event of any loss. To put it simply, IDV refers to the current market value of the insured’s car which has to be paid by the insurance company considering depreciation on the basis of the car's age and the maker’s present value.

IDV influences the Own Damage premium of a policy. Thus, you should compare several car insurance policies online to know which insurance company is accurately capturing the IDV of your car as without the comparison, you may end up agreeing to a false and higher IDV of your car. This will result in you paying a higher premium unnecessarily. Please note that this is applicable only for used cars.

Do Not Make Claims for Small expenses

A policyholder receives a no claim bonus (NCB) as a reward for not making a claim during the validity period of a policy. The NCB is nothing but a discount on the own-damage premium of the plan. Thus, by avoiding claims for small expenses, you can take home big discounts.

Below is a table which explains how much NCB a policyholder can get (As per IRDAI):

Transfer NCB At the Time of Policy Renewal

One should always remember to transfer the accumulated NCB while renewing the existing policy. All you need to do is declare your actual NCB to your new insurer at the time of renewing your car insurance policy.

Avail These Discounts

You can avail the following discounts to lower your car insurance premium amount:

1. AAI or Automobile Association of India Membership Discount
2. Anti-theft Devices Discount which you get by installing anti-theft devices as it reduces the risk borne by the insurance company.

Thus, these are some tips using which you can lower your car insurance premium to some extent. It is also recommended to check the insurance company’s portal occasionally to know more about any additional discounts by which premium amount can be reduced.

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Disclaimer: This article is issued in general public interest and meant for general information purposes only. Readers are advised not to rely on the contents of the article as conclusive in nature and should research further or consult an expert in this regard.