InvestorQ : What are some useful tips to reduce the amount of premium that I need to pay for my car insurance?
Neelam Naik made post

What are some useful tips to reduce the amount of premium that I need to pay for my car insurance?

Priyanka N answered.
2 years ago

You thought car insurance was simple, just wait! I can share with you 8 interesting tips to reduce your car insurance premium and make it more economical.

· Avoid the dealer in-built insurance. Firstly, it will come at a higher cost as compared to what you can get in the open market. Secondly, the dealer will typically have a tie-up with 1 or 2 car insurers. Hence you have to choose one of them only. Most dealers also have a commission paid out to them in terms of the number of insurance policies pushed and that is not in your interest.

· Ideally, buy car insurance online. Today car insurance packages are substantially standardized. Go the websites of the 5-6 leading insurers in India and check the premium by submitting car details online. This hardly takes more than 5-10 minutes to check out.

· Alternatively, go to the websites of aggregators that give you the option to choose the policy that is best suited to you. This can save you time and hassles and it is all in one place.

· Opt for bundled insurance. Let us say if you have 3 cars in your house and the other 2 cars are insured with the same insurer, then the insurance company will be more than happy to give you an additional discount for bundled insurance. This can work like a floater scheme.

· There are other ways to get bigger discounts. You can opt for voluntary deductibles. Here you agree to share the cost of repairs in case of a claim which reduces your insurance premium. As a member of the Automobile Association of India (AAI), you are eligible for an extra discount on insurance. Cars fitted with anti-theft devices approved by ARAI can also reduce your premium.

· Driving your car without third-party insurance is an offence under the Motor Vehicles Act. If you have been travelling during the year and your car has been lying idle in the garage during the year, then you can claim an additional discount on renewal by intimating the insurance company in advance. The insurer may either offer you an extended insurance period or lower premium.

· Annual renewal is a standard feature in car insurance. You can work towards lowering costs by ensuring that your insurance is renewed online. Insurance companies offer an additional discount for online renewals. Renew with the same insurer as they will be willing to give you a loyalty discount. Customer retention is the easiest form of customer acquisition for car insurers.

· Share as much information with the car insurer. Any information that reduces the insurer’s perceived risk will reduce your premium. If you have a history of safe driving, disclose that. Also inform the insurer whether the car will be driven in city roads or highways. Most insurers prefer self-driven cars over chauffeur-driven cars in terms of risk. For teetotallers, you get discounts from the insurer. It is estimated that transparent disclosure can help reduce premium outgo by 10-30%.

The moral of the story is not to treat your car insurance buying and renewal as just another routine activity. There are genuine ways to reduce your premium outgo and you can as well make the best of it! And the process is hardly anything complex!