10 ways to lower your auto insurance premium

When you buy a car, convenience comes at a price. In addition to maintenance, you also pay for vehicle insurance, which has two components: “third party” and “own damage” insurance or what is also called “all risks” insurance. While the first covers any damage or injury suffered by a third party in the event of an accident, the second insures the damage suffered by your car. Is there a way to reduce this financial liability or are both premiums fixed?

“In terms of civil liability, the premium is fixed and coverage is compulsory depending on the risk of damage to motor vehicles, the premium depends on the type of coverage required,” explains Rakesh Jain, CEO of Reliance General Insurance. This means that you can lower the premium for your comprehensive insurance not only by personalizing your coverage, but by considering several other factors as well. Here are some ways to lower your auto insurance premium.

1) Take out “pay as you drive” insurance

This is a relatively new concept in the Indian auto industry available since 2020 under the Irdai sandbox regulatory guidelines, and is only allowed to be marketed by a few insurers. “This is a usage-based offer, in which the insurer charges a premium only for the number of kilometers set at the start of the policy. However, the insured benefits from the same benefits as in traditional all-risk coverage, ”explains Jain. So if you drive occasionally, that would be a good way to lower the premiums, as less miles means a lower premium.

2) Do not buy all the additional coverages

Not all damage is covered by basic coverage. Add-ons expand the scope of your comprehensive coverage, but they also increase your premium. “You have to choose the add-ons according to your needs. So if you don’t live in an area where the water is saturated with water, you don’t need motor protection coverage, ”says Ashwini Dubey, auto insurance renewal manager, Policybazaar. com. “There are several add-ons that are less important but cost the same as others,” says Ankit Agrawal, co-founder and CEO, InsuranceDekho. Thus, you can easily forgo those like the daily allowance cover, or the one which covers the loss of personal effects.

3) Don’t make too many changes or upgrades

If you modify your car in any way, whether it is installing a CNG kit or an electronic device, you must notify the insurer as this may affect the premium. If you do not notify this, your request may be rejected later. “Modifications that increase the risk of theft, such as wheels, car interiors or paintwork, should be avoided. Likewise, any change in engine or mechanics to improve horsepower or increase acceleration results in increased risk and increased premium, ”says Aatur Thakkar, co-founder and director of Elephant.in, Alliance Insurance Brokers . “Other modifications you can avoid are bull bars, pressure alarms, tinted headlights or taillights, faux carbon fiber, flashing brake lights, and oversized or undersized wheels and tires.” , explains Agrawal.

4) Avoid small claims

If your car sustains minor damage like scratches or small dents, you should avoid making a claim as you will not be eligible for a No Claims Bonus (PNE) at the next renewal. The NCB is a premium discount you get from your insurer for not filing claims during the term of the policy and can range from 20 to 50%. You can benefit from this if you renew the policy within 90 days of its expiration. “So if the damage to your car is worth around Rs 2,000 and you need to get an NCB of Rs 6,000 next year, it is better to pay the amount out of pocket,” Dubey explains.

5) Install anti-theft devices in your car

Another easy way to lower your auto premium is to reduce the risk of vehicle theft. The higher the security, the lower your premium. “You can do this by installing anti-theft devices such as speed locks, burglar alarms, manufacturer-registered steering locks to get a discount on the premium,” Thakkar explains.

6) Increase your deductible

The deductible is the amount you pay out of pocket before the claim is covered by the insurer. The higher the deductible, the lower the premium you pay for your insurance. So if you are confident in your driving skills or don’t drive very frequently, it may be a good idea to go for a higher deductible, in order to lower your premium.

7) NCB transfer for new car

If you have accumulated a huge no-claims bonus over 6-7 years and are planning to buy a new car, you can significantly reduce your premium by transferring the NCB from your old insurance policy to the new car insurance.

8) Join an automobile association

Another simple trick that can get you a fixed auto premium discount is to become a member of registered organizations like the Automobile Association of India (AAI) or the Western India Automobile Association (WIAA).

9) For older cars, only take third party coverage

“While third-party coverage protects you financially against death, injury, or third-party property damage in an accident involving your vehicle, it is imperative to have damage coverage to protect you against the expense of damage to your own car. So not buying full coverage to reduce premiums won’t be wise, ”says Jain. However, it may be a good idea to only buy the third-party coverage if your car’s value is very low or if it is an older car. “If your car is very old or you plan to sell it soon, it is recommended that you only go with liability insurance, as it is cheaper than full plans,” Thakkar explains. Also, you can spend less on repairs than the premium you pay for full coverage.

10) Pay the premium on time, buy coverage online

Two easy ways to lower your premium are to compare and shop for insurance online, and pay your premium on time. “If you don’t pay your premium on time, the insurer may view it as a risk and could increase your premium amount,” Dubey explains.