How To Reduce Motor Insurance Premium Rates

Rising costs are taking a toll on our finances each day. Our monthly expenditures and outstanding loans have left little or no room for savings. Imagine you want to buy an expensive gadget, like a smartphone or tablet from an e-commerce website. You opt for an EMI, considering your overhead expenses. EMI options vary according to the bank's rate of interest. You choose the bank that offers a reasonable EMI and low-interest rates. Right?

Likewise, if you own a vehicle, motor insurance is an expense that cannot be avoided since it has been made mandatory under the Motor Vehicles Act. Paying premiums every year may seem like a hefty expense. However, there are certain methods by which you can minimise yourmotor insurance premium.

Here are some tips that can aid you in lowering your motor insurance premium without compromising on your coverage and other crucial benefits -

• Compare The Policy Options

In order to find a motor insurance policy that truly serves your purpose, you must compare the options available in the market. Check out the premiums charged by different insurance companies before choosing your policy. You can utilise various online platforms that provide a comparison of premium rates and other benefits.

• Choose The Deductible Wisely

As the name implies, a deductible is an amount you need to pay from your end when raising a claim for any loss or damage caused to your vehicle before your insurance company starts paying up. There are two types of Deductibles - Compulsory and Voluntary Deductible. A Compulsory deductible is a fixed amount set by IRDAI that must be paid from your end. A Voluntary Deductible is a type of deductible that you can voluntarily choose to pay from your own pocket.

The higher the deductible amount, the lower will be the premium amount. At the time of policy inception, if you know you are a safe driver, you can choose a high voluntary deductible amount, and save considerably on the motor insurance premium. This is of course with the clear understanding that in the event of any damage, you will be paying more money as you have opted for the voluntary deductible . Hence, weigh your finances and the level of risk you can bear before deciding the Voluntary Deductible amount.

• Keep Your Eyes On The Road And Save Money With Discounts

Driving safely and maintaining a clean driving record will reduce your chances of getting into an accident. No accident means no claims request. So, if you don't raise a claim during the policy year, then the insurance company shall issue a No Claim Bonus, i.e, a discount you get from your insurer for not filing claims during your policy term which can range from 20% to 50%.

• Avoid Raising A Claim For Minor Damages

If your vehicle has a small scratch or the headlight was damaged when another vehicle ran into it, you may have to bear the repair costs. However, the cost will be less since the damages are minor. Right?

It may seem pointless to file a claim for such minor damages. In the event that you raise a claim during that particular year, you won't be eligible for a No Claim Bonus at the time of renewal. You can save quite a bit by not filing claims. In light of this, it is advisable to refrain from raising claims for minor damages like dents and cracks.

• Transfer NCB To Your New Policy

In case you are planning to sell your old car and get a new one, the new one will require an insurance policy as well. You may even wish to change your insurance provider.You can save up on the new policy's premium by transferring the NCB from the old policy to this new policy. This can be accomplished by obtaining an NCB retention letter from the old insurance company, which can help you retain the discount on your premiums for your new policy.

• Become A Member Of The Automobile Association

Insurance companies offer discounts to drivers who are members of specific automobile associations in India. By joining the Automobile Association of India (AAI) or Western India Automobile Association (WIAA), you can receive discounts on your motor insurance premiums, helping you save money on your premium.

• Install Certified Anti-Theft Devices

No doubt, car thefts happen often in India. Installing certified anti-theft devices and being vigilant will lower the risk of your vehicle being stolen. You can do this by installing certified anti-theft devices like gear locks, anti theft alarms, steering locks from registered manufacturers to get a discount on the premium.

• Keep The Policy Up-To-Date

Make sure you renew your policy on time to avoid a lapse. The insurance company may charge you a higher amount on premium for renewing a policy that has already expired, as non-payment of premium is considered as a risk by the insurers. If you delay the renewal for a long time, then you might lose your accumulated NCB, which may not be applied to the subsequent year’s premium.

• Don't Mindlessly Opt For Every Available Add-On

An add-on cover for motor insurance offers additional protection for your vehicle. You can buy these add-ons at a certain extra cost.

It’s important that you decide the add-ons after assessing your unique needs and requirements. Every add-on may not be essential, and you can lower your premium by eliminating those and choosing the ones you actually require.

So, this was a list of the tips you can follow to make motor insurance less expensive for you by lowering the premiums as much as possible - without causing any changes to the cover amount. These prudent measures will help you leverage your savings in the long run.