Four-wheeler insurance policies have a fixed tenure. At the end of the tenure, you are required to renew the car insurance policy to keep it active and offer protection. Another aspect of a car insurance policy is the premium that needs to be paid for every policy tenure.
While this is calculated by the insurer based on various factors, there are ways to reduce the premium cost on your comprehensive car insurance plans. This article will offer some tips to help you reduce the premium when you renew the car insurance policy.
Tips to Reduce Premium Cost During Car Insurance Renewal
Here are some tips to help you reduce the premium when you renew the car insurance policy:
- Look at different insurance companies for better offers
With most insurers offering four-wheeler insurance renewal online, you have an opportunity to compare car insurance policies across insurers to find the best deal. Select the same type of policy and add-on covers and compare premium costs. In addition, insurers like Tata AIG tend to run discount offers from time to time. This can help you find the best deal when you renew your car insurance policy.
- Use the voluntary deductible feature
A deductible percentage of the claim amount that you agree to pay from your pocket whenever you file a claim. There are two types of deductibles:
- The Compulsory Deductible that is decided by the insurance provider
- The Voluntary Deductible that is chosen by the policyholder
Most insurance companies allow you to choose a voluntary deductible percentage in exchange for a discount on your premium. For example, if you choose a voluntary deductible of 15% and file a claim for ₹10000, you will have to pay ₹1500 when you file the claim, and the insurer will pay ₹8500. But, in exchange, the insurer will offer you a discount on the premium. Hence, if you don’t file a claim during the tenure of the policy, then you save money.
- Check the No Claim Bonus
For most car insurance policies, the No Claim Bonus or NCB forms a major portion of the discount on the premium when you renew your car insurance policy. Most insurers reward car owners for not filing a claim during the tenure of the policy. This reward is extended in the form of a discount on the premium of the renewed policy. This bonus can be accumulated and can go up to 50% of the premium amount within a few years.
- Fit an anti-theft device on your car
Insurance providers offer discounts on premiums to car owners to take measures to reduce the risk of damage to the vehicle. Since a comprehensive plan covers theft, installing an anti-theft device can get you a good discount. However, it is important to use a device that is approved by the Automotive Research Association of India (ARAI).
- Join an Automobile Association
Several automobile associations across the country do a lot of work on behalf of automobile owners. Most insurers offer a discount of around 5% to car owners who are members of such organisations.
- Buy a long-term four-wheeler insurance policy
There are multiple benefits of buying a long-term insurance policy for your car. These include:
- The convenience of not having to undertake car insurance renewal every year
- Upfront eligibility of NCB for all the years
- All other discounts and bonuses applicable to you become available upfront
- Premium rates and taxes are paid at the prevailing rates that protects you from any price rise in the future
- Change the Insured Declared Value of your car
To calculate the premium, an insurer uses the Insured Declared Value or IDV of your car. Usually, the premium is a percentage of the IDV. This is the notional market value of a car. Most insurers allow you to set the IDV below the one determined by it to reduce your premium. While doing so, it is important to remember that reducing the IDV would mean reducing the potential claim amount.
- Opt for third-party liability insurance only
This can be an option if you do not find the premium for a comprehensive four wheeler insurance plan affordable. In India, it is mandatory for every car to have a third-party liability cover. A comprehensive plan costs more than a third-party plan. Hence, by moving from comprehensive to third-party liability insurance, you can save on the premium costs.
While it is important and legally mandatory to buy car insurance, you don’t have to burn a hole in your pocket paying the premium. As described above, there are many ways to reduce the premium cost while you undertake car insurance renewal online. However, it is important to remember that every step taken by you to reduce the premium might impact the claim amount or cost you extra. Hence, make sure that you think about how you intend to use the car and take steps to reduce the premium to get a cost-efficient four-wheeler insurance policy that offers optimum coverage.