8 Ways to Reduce Premium Rates When Buying a Car Insurance Policy
Auto insurance can be expensive, but there are ways consumers can reduce premium rates. While it is advisable to compare car insurance quotes online using a reliable insurance web aggregator – to get the best options available at affordable prices – there are also other ways that can help a consumer save money.
Here are some tips for reducing premium rates while opting for an auto insurance policy:
Look for benefits
There are different discounts that an insurer offers to policyholders. These reductions are based on the insured person’s occupation, driving record, age and certain other factors.
“Therefore, users should check with the insurer for the various discounts they are entitled to,” suggests Rakesh Goyal, Director Probus Insurance, Insurtech Broking Company.
According to Goyal, location also impacts policy premium rates. If a person is in an accident-prone area, there is a good chance that he will have to pay relatively higher premiums. In this case, one can look for various options by comparing quotes online.
“A high voluntary deductible is however recommended for someone who has had no claims in recent years or someone who has excellent driving skills (the risk of an accident would be lower in such a case)” , explains Goyal.
Set up a security device
The installation of anti-theft devices is suggested, as these devices not only ensure the safety of the vehicle, but also help reduce the cost of the annual premium. Being a member of the Automative Research Association of India (ARAI) entitles the consumer to additional premium discounts.
Avoid excessive editing
According to Goyal, it is recommended to avoid making modifications to the car that can result in higher premium rates. The addition of spoilers, ultrasonic sensors, gadgets, etc. should be avoided to keep premiums at the lower end.
“Remember to notify the insurer if any changes are made. If not informed in time, the user could face unpleasant surprises when making the claim, or in some cases, the insurer could even invalidate the policy,” advises Goyal.
No claim bonus from old to new
Consumers can transfer their accumulated NCB to the new car purchased because auto insurance is linked to the insured and specific to the car. Even after selling the old vehicle, you can ask the insurer to provide him with a no-claims certificate.
Users can then transfer the existing policy to the new car and carry over the bonus. This will help reduce the amount of the new policy premium for the new car.
Choose the correct Insured Declared Value (IDV)
IDV is the amount the car is insured for and forms the basis of all settlements in the event of theft or irreparable damage in an accident.
According to Naval Goel, CEO and Founder of PolicyX, a lower IDV demands a lower premium. However, it must be calculated wisely, as the IDV is the maximum value with which the insurer can compensate.
Select add-ons wisely
“Addons should be selected based on the needs and condition of the car,” says Adarsh Agarwal, Appointed Actuary at Digit Insurance.
“For example, if someone has a car that is more than 3 years old, adding zero depreciation may not be too necessary, but for a new car it is a must. Therefore, with such decisions, one can opt for comprehensive insurance coverage without much of a pinch of pocket,” he suggests.
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First post: STI