Car insurance provides financial security to the car owners against financial loss due to accidental damage or other unfortunate events like theft, fire, natural calamities, etc.
It is also a mandatory requirement to get a third party car insurance in India for all car owners as per the law. A third party car insurance provides financial assistance in case of damages caused to the third party due to your car accident.
Although a mandatory requirement, several Indian’s avoid getting their car policy renewals as they find quite expensive, so here are few tips to reduce the premiums on car policy renewals:
1. Compare Car Insurance online:
By comparing different car insurance policies online, you should be able to evaluate not only the best car insurance in India but also the cheapest car insurance which would match all your insurance needs. at the convenience of your home.
2. Avoid Unnecessary Add-Ons:
Car insurance companies offer several additional riders such as Engine protection, Zero depreciation, Roadside assistance, etc. along with the main policy. These additional riders increase the scope of your insurance coverage but also increases the premiums of your car insurance.
Hence, you should select these add-ons wisely and avoid purchasing unnecessary add-ons which would help in reducing the cost of premiums on your car policy renewals.
3. Increase Deductibles:
Deductibles are a portion of total claim that the policyholder may choose to pay it themselves. Most car policy buyers opt for deductible as 0, in this case, the car insurance company would pay 100% of the claim amount, however, keeping the deductible as 0 increases the cost of your premiums.
You can increase the deductibles to reduce the cost of premiums. However, do not increase deductibles randomly, make sure to check that increasing deductibles does not put you in liquidity crises and you are comfortable paying the said portion of the total claim.
4. Bear expenses on small damages by yourself:
Car insurance companies provide discounts on premiums in the form of No Claim Bonus (NCB) for every policy year you do not make a claim. This helps in reducing the premiums of your car insurance policies greatly.
Discounts on premiums under Non-Claim Bonus benefits:
| Years | Discounts in Premium under NCB |
| If claim is taken in last 1 year | 0% |
| If claim is not taken for 1 year | 20% |
| If claim is not taken for 2 years | 25% |
| If claim is not taken for 3 years | 35% |
| If claim is not taken for 4 years | 45% |
| If claim is not taken for 5 years or more | 50% |
Now, assume if your car insurance policy premium is Rs 6000 and you do not make a claim in 1 year then the discount on premiums during renewal will be of Rs. 1200, and hence your car policy renewals would cost you only Rs. 4800.
By taking claims for small damages, these NCB benefits are lost. Hence, to keep your car insurance premiums low it is recommended to pay for small damages on your own.
5. Transfer of NCB certificate from old car to a new car:
Car insurance companies in India allow policyholders to transfer their existing car insurance policy from old car to a new car along with accrued NCB benefits.
Hence, if you are planning to sell your old car, make sure to get the no-claim certificate from the car insurance company first. You can keep the no claim certificate stored safely in case you do not wish to buy a new car immediately. Whenever a new car is purchased. You can request the car insurance company to transfer the existing car insurance and NCB benefits accrued over the years to your new car’s insurance policy. Thus, helping you in reducing the car premiums of new car insurance.
6. Benefit of installing anti-theft devices on your cars:
An anti-theft device installed on your car reduces the risk of your car getting stolen. This helps in reducing the premiums of your car policy renewals.
There are several anti-theft devices available in the market such as gear locks, steering locks, anti theft alarms, etc which can be installed on your car to reduce the risk of your car getting stolen.
7. Concessional premium rates for few Associations:
Car insurance companies in India provide insurance policies at concessional premiums to Associations like Automobile Association of India (AAI) or Western India Automobile Association (WIAA) which are empowered by Motor Vehicles Act. You can join these Associations to get car insurance at concessional rates.
8. Reducing the IDV on your cars:
Adding new parts such as alloy wheelers, spoilers, etc to upgrade your car performance or looks would increase the IDV of your car and thus increase the premiums as well. You may avoid adding additional parts to reduce the IDV and premiums.
Make sure to inform the car insurer of any modification done to the car that increases the IDV as your insurance policy may get invalidated in case the IDV is increased without proper intimation to the Insurer.
9. Reduce Insurance coverage on old vehicles:
You can opt to have only the Third-party insurance or a comprehensive insurance with very low IDV for your old cars to reduce the premiums.
10. Avoid old car insurance policy to lapse:
A lapsed car insurance policy does not get the NCB benefits. Hence, make sure to renew the car insurance policy on time to continue getting the NCB benefits on your premiums.
