Between tiring local transport commutes and searches for cabs online, don’t you wish for an easier way to travel? Fortunately, purchasing a four-wheeler has never been easier! These days, banks and online lenders are willing to sanction car loans to those who qualify. It gives you more control over daily travels, and it could be cheaper than paying surge prices for cabs regularly.
However, as exciting as this acquisition may be, it’s one that requires adhering to several rules and regulations. The most important is the mandatory rule of the Insurance Regulatory and Development Authority (IRDAI). As per the Motor Vehicles Act, all vehicle owners must compulsorily own third-party insurance cover. Those caught without a valid motor insurance policy will be penalised.
Car Insurance: Why are the Premiums so High?
Some are intimidated by the fear of carrying invalid or no car insurance, but others may find the whole task daunting. It’s a crucial piece of document for all vehicle owners. Despite IRDAI fiercely enforcing this rule, many vehicle owners are reluctant – labelling it an exorbitant expense. But that’s not quite the case!
Car insurance companies estimate the total annual premium by calculating various factors. These variables can influence the cost, resulting in either moderate or high prices. Before you rush to find ways to reduce it, understand the factors that are used to estimate car insurance premiums.
- Increased Rates: Whether standalone or within a comprehensive cover, third-party insurance is subject to increased rates as per the IRDAI’s discretion
- Insured Declared Value (IDV): Maximum amount paid by insurers in case of total loss – The premium may increase if the IDVI indicates high liabilities
- Claim History: Multiple or fewer past claims will reveal to insurers whether they’re dealing with risky or responsible drivers
- Car Type: Different premiums are charged for luxury and hatchback cars since their parts differ in price during repairs or replacement
- Age of the Car: Each passing year depreciates the car’s value, resulting in higher claims for new cars over older ones
Once you grasp the factors that insurers use to estimate the premium levied for car insurance, seek ways to reduce these charges. Search for tips and tricks to lower the costs of such frequent expenses.
Hacks to Lower Car Insurance Premium
Due to soaring fuel prices, people are scrambling in search of creative ways to reduce their running expenses. While there’s no option to opt-out of owning car insurance or at least a third-party cover, you can use the following hacks to lower policy premiums.
1. Pay for Minor Repairs
While your policy may permit making claims for repairs, it’s advisable to pay for them out of your pocket. If your budget allows, pay for damages like broken tail lights or minor dents. Even small claims like these can rob you of No Claim Bonus (NCB), a discount bonus you can avail during the next policy renewal.
If you come across any minor car repairs, pay for them yourself! Avoiding small claims can lead to better benefits financially at the time of renewal.
2. Install Anti-Theft Devices
Lend a helping hand to insurance companies by installing smart anti-theft devices in your car! Most insurers offer discounts on the premium if you install devices like alarms and tracking devices. It reduces the risk liable to the insurer and allows them to dispense additional benefits like discounted premiums.
Before your next renewal or purchase, ask about this clause to reap its benefits.
3. Avoid Add-On Covers
Some insurers may try to entice you with the advice to purchase add-on covers for new cars, but that’s usually unnecessary. Not only does it increase the premium value, but it may not come in handy for you. So, carefully assess the covers and whether you’d need them before adding-on any.
4. Opt for Deductibles
It might feel counter-productive, but it could significantly reduce the annual premium. During each claim, the co-pay clause makes you liable for a small percentage of the maintenance and repair bills. As per your financial condition, weigh out the pros and cons of availing this option before making any decisions.
5. Transfer Car Insurance Policies
Before purchasing a new car, transfer your car insurance from the old one. Just transfer the policy to carry forward accumulated benefits like NCB and other rewards to the new vehicle. For more information, reach out to your car insurer.
So, make sure you use some of these hacks to lower your premium next time! Once the car insurance is purchased, the insurer will issue a certificate. Carry this legal document each time while driving in case of legal inspection. Still haven’t renewed your policy or want plans that offer better coverage? Visit Bajaj MARKETS for the best car insurance available!