Tips and Tricks To Trim Your Car Insurance Premium
Published On May 03, 2021 10:00 AM By InsuranceDekho
Looking to cut down on your car insurance premium? In this article, we will tell you everything you need to know about it.
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Purchasing a car is one of the biggest expenditures we make in our adult life. Moreover, it has also become a crucial part of our lives. In such cases having insurance has become more important than ever before. With car insurance, you will have a layer of protection from the uncertainties of the road. In case of a mishap, the insurance will offer compensation for the damages and hence, provide financial stability in times of crisis. However, when purchasing insurance we all want a policy that is effective but is also a good deal. In this article, we will help you with some tricks which may help lower your car insurance claim.
What are the Factors That Determine the Car Insurance Premium?
Following are the factors that impact the premium of your car insurance:
- Age: Like all machines, the older the car the more trouble it is expected to give. Hence, the market value of the car and the Insured Declared Value factor in this by calculating the depreciation rate of the car according to its age.
- Make and Model: Cars that are more expensive, such as high-end models are more of a liability to the insurance provider. Repairing the cars and the cost of their spare parts are also higher. Hence, the insurance provider takes this into account when deciding the premium amount.
- Type of Cover: The cost of a third party insurance cover is much lower than standalone own damage insurance or a comprehensive insurance plan as it offers the most basic and compulsory coverage. Whereas the standalone and comprehensive plans offer far greater protection to the car in case of a mishap.
- Engine Capacity: The higher the capacity of a car’s engine the more risk they pose to the insurance provider. Hence, the premium is higher for cars with high capacity engines.
- Location of Insurance Holder: Certain places such as cities, pose a higher risk due to overcrowding, heavy traffic or even a history of car theft. Hence, the insurance provider might charge more for people who live in such locations.
- Past Claims: If the insurance holder in question has a past history of several claims, they pose as a greater liability to the insurance holder. Hence, when the insurance company checks your history and it has several claims they offer a higher premium.
- Modifications of the Car: Modifications tend to be expensive, hence, theta dd a greater risk of loss in case of a mishap.
What Can Be Done to Reduce the Car Insurance Premium?
The following tricks will help reduce the premium of your car insurance:
- Only Third Party Insurance for Old Cars: When the cars are older the depreciation rate is higher. This makes both the premium and claim amount significantly lower. Hence, in such situations, it makes sense to only purchase third party insurance since it is compulsory and simply keeps savings aside for car repairs.
- Anti-Theft Devices: Installing anti-theft devices on your car lowers the possibility of theft and the risks that it poses to the insurance providers. Hence, they offer lower premium rates to such insurance holders.
- Avoid Modifying the Car: Though it can be tempting to add features to the car and make it your own, this will add to your premium. Hence, if you are looking to keep the premium low avoid making such changes.
- Compare Premiums: When you purchase car insurance online you can easily compare the insurance quotes, the different car insurance companies and their network of cashless garages. This will help you find the best-suited policy for your needs and price point.
- Higher Voluntary Deductibles: All car insurance policies have deductibles, however, if you select further voluntary deductibles your insurance premium is lower. By doing this you agree to share the cost of the damage with the insurance provider in the event of a mishap.
- Only Purchase Necessary Add-ons: Add-ons can make a significant difference to your claim amount, However, they also come at an additional cost making your insurance premium higher. Hence, if you are looking to save on your insurance premium make sure to only select the add-ons that are useful to you.
- Avoid Filing claims for Minor Incidents: Claims that are minor and lower than your accumulated No Claim Bonus are best not filed for. This way you can keep your NCB intact and it will give you a lower NCB when renewing the insurance.
- Pay As You Drive Insurance: If you have more than one car and use one car much less, this may be the way to go. With this type of insurance, you can pay a premium based on how much distance you cover with the car in a year.
- Do Not Let Your Policy Lapse: Allowing your car insurance to lapse is a sign of carelessness on part of the insurance holder. Moreover, the NCB accumulated will also be lost. When you renew lapsed policies insurance providers offer it only at higher rates.
In a nutshell, the above-mentioned points if followed will ensure that the insurance premium you pay will be the best deal available out there. Moreover, keep in mind there is more to insurance than finding the cheapest premium rates. An effective policy will be affordable and effective. Moreover, this type of insurance is also what will make financial sense in the long run. Lastly, the best way to find the insurance policy that is best suited to your needs is by making an informed decision. You can learn about the basics of car insurance by reading our other articles on car insurance.
Disclaimer: This article is issued in the 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.