Categorized | Car Insurance

ways to reduce car insurance premium

Today as we all know, car insurance is mandatory in India. Read on to find out the basics of car insurance, car insurance Premium and tips to minimize premium payments.

What is Car Insurance?
Insurance basically means protection or security, and consequently car insurance refers to insuring yourself against the basic risks while operating a car. Some of the most common risks faced by a car owner are minor or major accidents of the car or the car getting stolen. In such cases, having a good insurance Policy ensures that the financial losses that you incurred in such situations are compensated or reimbursed by the insurance company to which you pay your premium. It is important to know all the risks that you are Insured for, to Claim your reimbursement. 

It is absolutely essential to go through the insurance policy and compare all the criteria for which you are covered. Then, select the policy providing the most Comprehensive insurance cover with the best premium rates.

What is Insurance premium and how to minimize your premium?
Insurance premium refers to the money you pay monthly or annually to your insurance company to avail continued Coverage on your insurance policy. Since this is a constant investment, you should aim at getting the maximum coverage for the best premium rates. Here are a few pointers as to how to minimize your insurance premium.

  1. As we have previously mentioned, compare the premium rates and the coverage offered by various insurance companies.
  2. The make and model of the car you buy largely influences the premium you pay since each model has its own claim record, thus the more claim prone a car is the more the premium, which essentially means that opting for an economy class car will lower your premium cost compared to that of a luxury or sports car.
  3. When you opt for policies where you have to pay for the damages or injury and you can later claim reimbursements the premium rate is low. But be sure to read the terms and conditions clearly since the company may not reimburse your entire damage expenses. Choosing to insure yourself against loss of personal belongings such as locks etc. is likely to add to your premium cost, thus avoid opting for these criteria by rather investing once in a good security system for your car which may actually end up getting you a discount on the premium.
  4. Avoid lapses of policy as this will most probably make you ineligible for discounts or sometimes even increase your premium.
  5. Your premium cost can get discounted from 20% to 50% in case you avail a no claim Bonus by driving cautiously and accumulating the bonus by not making any claims for a stipulated time period.
  6. Mention your correct profession while you get car insurance since the premium cost also depends on the degree of car usage. Also, doctors and charted accountants and some other specific professionals are eligible for discounts in their premium.
  7. The greater the amount of voluntary excess you agree to pay the lower your premium. Voluntary excess refers to the amount of money you agree to pay before the insurance company pays its part of the claim.
  8. Opting for a petrol car lowers your premium since they are cheaper than CNG or LPG cars.
So be smart and use these tips to help keep your Insurance premium as low as possible.