EMIs and premiums are a big part of adult life – home loan premiums, health insurance premiums, auto loan EMIs, and sometimes even phone premiums. Some premiums can be avoidable – if you plan ahead and discipline your spending – but not all of them. For example, car insurance premiums cannot be avoided because they are mandatory.
Everyone knows that having auto insurance is mandatory if you use a car. Any car found driving on the roads without valid auto insurance will face severe penalties. If you are ever caught driving your vehicle without your insurance papers in place, you will have to pay a fine of ₹2000, and if you are found guilty of a repeat offense you could pay a fine of ₹4000, have your license revoked and even be imprisoned.
However, car insurance should not be seen as a burden but as a layer of protection. Anyone who drives a car on Indian roads knows that the road condition is not always the best. Many people and vehicles are on the roads at all times, and potholes and construction always lead the way. You have to be very careful to avoid accidents, but if it happens anyway, only car insurance can save you from a world of responsibilities.
So, if you are planning to buy a car, you must purchase a car insurance policy. And if you already have one, be sure to renew it before it expires. For the purchase of a new policy, you can take certain steps to reduce auto insurance premiums. And if you want to know how to do that, keep reading.
Ways to Lower Premiums When Renewing Auto Insurance
Below are some of the best and easiest ways to lower your car insurance premiums when renewing. Review them carefully to ensure you get the best deal for yourself.
Did you know that the NCB is linked to the insured person and not to the vehicle? Few people know that the AON that accumulates during periods without claims is always to the benefit of the insured. Plus, the NCB increases every year you haven’t applied, and you can get up to 50% off if you haven’t applied for 5 years or more. And if you buy a new vehicle after selling the old one, it’s transferable because it’s credited to you, not your vehicle. However, never forget to request the NCB papers for your car from the insurer. This will give you a premium discount when renewing an auto insurance policy.
These are voluntary deductibles if you decide to cover yourself under your insurance policy. Your optional deductible limit reduces the insurer’s claims liability. As a result, the insurer grants a premium reduction. So, by choosing a higher voluntary deductible, you can reduce the cost of your renewal premium. However, note that the amount to be received in the event of a claim will decrease accordingly.
- Renew your policy on time
Don’t wait until the last possible moment to renew your car insurance. Always be aware of the expiration date of your insurance. Once you’ve passed your expiration date, some insurance companies offer a buffer period of a specific number of days. However, if you apply to renew the auto policy after it expires, you may lose the opportunity to earn PNE or other benefits that you would have received had you done so sooner.
- Insured Declared Value (IDV)
The insurance provider’s Insured Declared Value (IDV) for your vehicle will continue to decrease by 10% with each renewal. The IDV, in fact, is the sum that the insurer will cover if your vehicle is stolen or completely damaged.
However, most of us desire a high IDV, which affects the cost of car insurance plan. A higher IDV means a higher premium, but a lower IDV means a lower premium and lower insurance payout at the time of claims. Therefore, the correct IDV for your car can affect the payment you receive in the event of theft or total loss, so you should be careful when selecting the value when renewing.
- Check the different policies
Many car insurance plans are available – third party car insurance, standalone damage coverage and comprehensive car insurance – each with a separate premium cost and coverage limit. Price comparisons are necessary to find the best premium rate and reduce the renewal price. Go online, evaluate the different auto insurance options available, then choose the plan that offers the best insurance protection at the lowest premiums. It is permitted to change car insurance plans when the current one is about to expire. So shop around for the best coverage and lowest premiums when renewing your car insurance to reduce the cost of renewal.
Now that you know the different ways to lower your auto insurance premiums, you need to be on the lookout when renewal time comes around. So the first thing you need to do is find out when your policy expires and then jump on the bandwagon to research better policies or other ways to lower your policy premium.
- This article was produced on behalf of Tata AIG
- All persons mentioned in this article are fictitious and all examples have been incorporated as case studies. Any resemblance to a real case/person is purely coincidental and completely unintentional.
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