Last year the Insurance Regulatory and Development Authority of India (IRDA) increased the premium rate for third-party motor insurance. Following this, the premium amount for car insurance has increased by 25 – 40 percent depending upon the car’s engine capacity.The overall premium of private vehicles has escalated by 5 – 6 percent in cars with engine capacity of up to 1,000cc and by 15 – 20 percent for a car with engine capacity above 1,500cc. Though the third-party premium amount is set by the regulator there are means by which the insurance premium amount can be reduced.
In this blog, we will talk about how you can reduce the insurance premium for your car.
Here are the five ways you reduce the auto insurance premium are:
#1: Increase the deductible amount
By increasing the deductible amount, the policyholder can reduce the auto insurance premium. The deductible amount is the sum which the policyholder pays from his pocket while making a claim. However, the policyholder must select the deductible amount depending upon their financial condition. They are advised to start with the low deductible amount and raise it later. Ideally, the deductible amount should be less than the No-Claim Bonus (NCB) amount of which the policyholder is entitled in the next year.
#2: Avoid small claim expenses
Policyholders are entitled to NCB for every claim-free year. Though the prime motive of the auto insurance is to cover for any damage caused to the vehicle, the policyholder must skip the claim in case of small issues like a broken headlamp or tail light. The reason behind this is that the repair cost of these small issues will be considerably less compared to the amount received as NCB. On the renewal of the auto insurance policy, the NCB amount is deducted from the cost of the premium, thereby reducing the premium cost.
#3: Transfer NCB to the new car
The accumulated NCB can be transferred to the new car purchased because auto insurance is linked with the policyholder and not the car. Thus, it is wise to retain the insurance even after selling the vehicle and ask for an NCB certificate from the insurer. This will help in reducing the car insurance premium rate of the new insurance policy purchased for the new car.
#Number 4: Install anti-theft devices in car
Due to the rising auto thefts in the country, it is better to install such devices because these devices will not only ensure protection to the vehicle from theft or burglary but installing devices like gear lock, steering lock or anti-theft alarm will reduce the annual insurance premium by about 5 percent.
#Number 5: Buy auto insurance online
Today, there are many online insurance portals that let you compare insurance premium quotes within minutes. Moreover, you get better deals online, as most online platforms sell car insurance at a lower price than offline channels. Plus, you can buy car insurance from the top insurance companies just within five minute completely in a paperless manner.