5 effective ways to help lower your car insurance premium

When you buy a new car, it is not only a landmark event in your life but also a matter of immense pride. The car becomes an integral part of your daily life. You use it to commute to work or run some daily errands. The vehicle also becomes an instrument to spend quality time with your family and friends as you use it to drive them to vacations, or just for some short trips to movies and shopping malls. So, it is crucial that you also treat your car right. Keeping the insurance policy of your car up to date is the very first step in that direction.

There is no doubt, however, that buying a new car incurs a major expense. So, it’s only natural for one to wonder if they can save some money especially when it comes to other additional expenses like the insurance cost. However, you must not lose the sight of the big picture by compromising the protection for your vehicle. As per official statistics[1], over 4.5 lakh road accidents happen every year on Indian roads. Moreover, cases of vehicle thefts are also rampant in the country with around 2.5 lakh vehicles stolen every year, as per the latest data from National Crime Records Bureau[2]. Out of these, less than 25 per cent are ever recovered. So, while you would like to reduce the recurring costs that come with a car insurance policy, you would also want to keep your vehicle protected. So, what you actually need is the right balance so that you have the right insurance cover for your beloved car while also making sure that those recurring premiums don’t get out of hand. By following a few simple steps, you can achieve that balance.

Compare premium from different insurers: All general insurance companies offer online covers. Based on the age, driving record, and profession of the insured, some insurance companiesalso offer concessions. It is a good idea to compare premiums offered by different insurers and make an informed choice so you can get the best bang for your buck.

Use no claim bonus wisely: If you buy car insurance and don’t make a claim, you will be entitled to a no-claim bonus (NCB) for every claim free year. Though the actual no-claim bonus varies from company to company, for five consecutive claim-free years, it can go to as high as 50 per cent of the premium. So it is a good idea not to claim insurance for small damages or repairs, thus keeping your ‘no-claim-bonus’ intact. So, unless it’s a major repair, you could pay out of your pocket and end up saving a much larger sum in the form of NCB when you renew your policy.

Voluntary deductions: Another great way to reduce your insurance premium is to evaluate how much voluntary deductions you can take. A voluntary deduction is a part of the claim that the policyholder opts to pay from his own pocket before raising it to the insurer. This means that aside from the compulsory deductions that you need to pay out of pocket for an insurance claim, you can voluntarily add a small percentage to it. This would increase the money you may spend for repairs if an accident takes place, but will help you reduce the premium as well. Compute quotes with the online car insurance premium calculator to determine the impact of these variables on your final premium.

Transfer bonus: Not many people are aware of the fact that car insurance is linked to the person who buys it, not to the car. This comes with a major advantage that when you switch your car, you can transfer the accumulated no-claim bonus to your new car. This would bring down the cost of insurance for your new car. So when you sell the old car, retain the insurance in your name and you can use the accumulated No Claim Bonus to reduce premium on the insurance of your new car.

Renew your policy on time: The very basic rule to keep your insurance premium low is to make sure your policy does not lapse. Not only do you need to go for a physical inspection of your car if you let its insurance policy lapse, it also leads to an increase in its premium. In many cases, the no claim bonus isn’t admissible if the policy lapses. So, make sure you always pay your insurance premiums on time.

Safety is priority: Last but not the least, one should drive safely to avoid possible accidents.  Also, making your vehicle safe can earn you premium concessions. Car insurance policies offer such concessions if you install safety gadgets in your vehicle like ABS, anti-theft devices, etc. Hence, to avoid paying the higher insurance premium, drive safely, add safety features and don’t make minor claims.

Some companies offer additional benefits to those who are looking to insure their cars. Bajaj Allianz General Insurance, for instance, lets you include add-on benefits allowing you to customize your policy as per your requirements. It also gives you, the policyholder, an option to include or exclude insurance on your car’s additional fitments, with the basic policy premium calculated excluding that cost. So, you have the flexibility to pay more to get those fitments covered, or keep the premium low.

An insurance cover protects you from the monetary losses and brings a sense of securitywhen you are out on the roads. Be careful in choosing coverage for your car insurance policy and pay for what you need to reduce the premium of your car insurance policy. You can use one or all of these tips for getting the lowest premium for your car insurance policy and save your hard-earned money.Insurance is the subject matter of solicitation. For more details on benefits, exclusions, limitations, terms and conditions, please read sales brochure/policy wording carefully before concluding a sale.

Disclaimer: This content is by Bajaj Allianz General Insurance. No TNIE Group journalist is involved in the creation of this content


[1] https://pib.gov.in/PressReleasePage.aspx?PRID=1689726

[2] https://ncrb.gov.in/sites/default/files/CII%202019%20Volume%203.pdf