If the rising inflation and limited movement amid the third Covid wave have got you wondering about how to reduce your insurance premium, know that there are simple ways to do so effectively.
Even in two years of restricted mobility, if something that has continued to be an essential part of one’s life despite limited usage, it has to be one’s car. Whether or not you are driving, you always look out for even the slightest damage to your car. Just the way your car is an integral part of your life, motor insurance is an integral part of your car. So, even if you have cut your driving in half, it’s mandatory at all times to make sure that your car insurance is in place.
As you are probably aware, third party cover is a mandate by law for all vehicles being used in a personal and commercial capacity. However, if the rising inflation and limited movement amid the third Covid wave have got you wondering about how to reduce your insurance premium, know that there are simple ways to do so effectively. Let’s do a round-up of some useful tips to save more on your car insurance premium.
Make the most of your NCB
A No-Claim Bonus or NCB is the best way to save on your motor insurance premium. It rewards you for every claim-free year with a discount on your premium upon renewal in case of no claims. As per the rules, you can avail of up to 20% discount on your first year of no claims, 25% for two years, 35% for three and 45% for four consequent years with no claims. Make sure you do not lose out on this benefit by making these two mistakes – Not renewing your policy within three months of the policy expiry date, and losing the entire NCB by making a claim even for a small amount. For small damages, always pay out of your pocket rather than making a claim. Furthermore, in case you are buying a new vehicle by selling off the old one or carrying your policy to a new insurer, always remember to transfer your no-claim bonus.
Save more by buying insurance online
It is always advised to conduct thorough research before buying your car insurance policy. This doesn’t just include terms and conditions but also a comparison between various insurers and the benefits they are offering. Since one has limited reach offline, it’s always best to visit the websites of online insurance aggregators for buying affordable and best-suited motor insurance. With the online purchase, it’s always easier to compare the prices, features and benefits of different insurers and select one as per your individual needs and requirements. Also, the online distribution channels are any day more economical than the traditional ones, so that brings down your premium as well. It is also convenient to check key aspects like the claim settlement ratio of different insurers as it directly impacts your policy. So, don’t forget to compare online before making a final call.
Factor in your deductible
Deductible, also known as voluntary deduction, is a key factor in deciding your premium cost. It is an out-of-pocket expense borne by the policyholder at the time of making a claim. Choose your deductible wisely. If you keep it zero, you will receive the entire claim amount but end up paying a higher premium. If you are a seasoned and confident driver or you have not made a claim for a few consecutive years, you can choose a higher deductible which will help reduce your premium amount.
Evaluate your requirement: TPI Vs Own damage cover
The outbreak of Covid has made remote work and staying indoors the new normal, at least for the duration when the caseload is significantly high. So, this is probably a good time to re-assess your insurance needs. Since third party insurance is a compulsory must-have, its purchase is non-negotiable. You need to further decide on purchasing your own damage cover depending on usage. For new car owners, the law has mandated a 1 year comprehensive + 3 year TPI policy while buying the car. This means that for the second and third years, the customer only has to buy a Standalone Own Damage (SAOD) policy. But, suppose you have an old car that you are not driving frequently, then a third-party cover should suffice. For small damages, the expenses paid out of pocket might cost less than the comprehensive policy’s premium.
Pay premiums and renew your policy in time
The simplest way to save on car insurance premium is by being regular in premium payments and renewing the policy within the stipulated time. If you don’t pay premiums in time, the insurer might assess this as a risk for the future and raise your amount. Additionally, if you let your policy lapse, you will lose out on the key benefit – your earned NCB. Also, you will have to go through the inspection process again and depending on your vehicle’s condition, the insurer might increase the amount.
(By Ashwini Dubey, Head-Motor Renewals, Policybazaar.com)