7 Tips to LowerCar Insurance Premium Rates Without Cutting Coverage

Posted on: July 17, 2017, by :

Ironically, many people don’t think twice before spending money on cars, but become frugal when it comes to buying a car insurance policy which plays an imperative role by shielding them andtheir car against many losses or damages. They go to any extent to reduce their car insurance premium rates. However, what they forget is—the money that they would have to pay from their pocket in case of an accident.

Also, many people ignore the car insurance policy because they think themselves as an excellent driver. However, what they forget is—sometimes accidents happen not because of your fault but because the other person on the road doesn’t pay heed to the basic road safety rules.

So, instead of cutting your car insurance coverage, follow the belowtipsandlower your car insurance premium rates=

  1. Go for higher deductibles= Well, if you have full faith in your driving skills, it is the time to test them. You can go for higher deductibles and enjoy the lower insurance premium rates. Here, deductibles are what you would have to pay at the time of claim before the insurer kicks in. Let’s assume the claim amount as Rs 8000 and your deductible as Rs 2,000. Then it means, you would have to cough up Rs2,000 and the remaining Rs 6,000 (8,000-2,000) would be borne by the car insurance company.

However, go with a higher deductible only if you can afford it. There is no point in choosing the higher deductible and getting lower car insurance premium rates if you would have to pay the major part of the claim from your pocket.

  1. Install anti-theft covers= Insurance companies love those policyholders who take steps to curtail the losses or damages. Therefore, if you install anti-theft items, like steering lock, lug nut, gear lock, etc.; your car insurer can extend discounts to you. However, to get discounts, make sure to buy these items from the authorisedmanufacturers. Further, if you become the member of the Automotive Research Association of India (ARAI), you can avail extra discounts.
  2. Don’t approach the car insurer for fender-bender damages= Though, the purpose of car insurance is to protect you and your car from financial loss, it is not a wise idea to approach the insurer for every small damage, like broken lights, minor scratch on thedoor, etc. If you don’t make a claim in the policy tenure, the insurer rewards you with No Claim Bonus (NCB), which means a reduction in the premium rates.

NCB Rate Grid

After one claim-free year 20%
After two consecutive claim-free years 25%
After three consecutive claim-free years 35%
After four consecutive claim-free years 45%
After five consecutive claim-free years 50%


Check the above table to know how much NCB you can earn by not claiming and how much you can lose if you file a claim. Whether it is a small claim or a big amount, you will lose the No Claim Bonus (NCB) on your every visit to the insurer. If the repair cost is less than the NCB that you would lose if you approach the insurer, it is advised to go to the local mechanic who can take care of such small repair works at a less price.

  1. Transfer your NCB bonus= As NCB is awarded to the policyholder and not the car, you can transfer the NCB and your motor insurance policy to your new car in case you decide to sell your previous one and enjoy easy premium rates. It means, at the time of selling your car, you should retain your car insurance policy.
  2. Choose riders prudently= Adding riders to your main car insurance plan can increase your premium rates. So, if you already have a comprehensive personal accident insurance, stay away from addinga personal accident rider to your car insurance policy. However, before dropping any rider, carefully evaluate their benefits and make sure that you can deal with the expenses which you might have to face in its absence.
  3. Drive carefully= The last but not the least, be attentive while driving your vehicle and follow all the traffic rules while on the road. When you drive carefully, you will surely be able to lower the accident rates and the number of your visits to the insurer, which further translate into lower insurance premium rates.
  4. Renew your car insurance policy before the due date= Usually, car insurance policies are the annual contract plans, i.e., you would have to renew the policy every year to continue enjoying its benefits. In case you don’t renew your policy before the due date, your insurance coverage will cease to exist and later if you approach the insurer, your case will be considered as fresh, and you would have to payextra premiums to buy or reinstate the lapsed policy.

To avoid paying penalties or high premium charges on a lapsed insurance policy, it is strongly recommended to renew your car insurance policy before the due date.

Undeniably, car insurance is a useful tool to safeguard you and your vehicle. So, instead of compromising with the coverage, follow the above tips to trim yourcar insurance premium rates.

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