Every car in India should be protected under a car insurance policy. The Motor Vehicles Act, of 1988 mandates that all car owners buy insurance cover for their four-wheelers. However, as per the mandate, it is only compulsory to buy third party liability cover. The decision to purchase the coverage for damages to your own car is left to the discretion of the car owner. If your car ends up accidentally injuring or killing a third party or causes damage to their property, Third Party Liability Cover provides financial assistance for the uninvolved. On the other hand, own damage cover covers any damage or loss to your car caused by accident, fire or man-made disasters, natural disasters, or theft.
Whether you decide to purchase car insurance online with comprehensive coverage or decide to purchase only third-party liability cover, it is important to buy the optimum coverage at an affordable price. This means that you must pay attention to the premium that you are buying the policy at. Moreover, you need to take all measures to bring your car insurance premium as low as possible.
- Transfer the NCB benefit
No Claim Bonus (NCB) is a non-claim benefit. This means if you don’t make a claim, you will continue to receive concessions on your car insurance premium. If you have sold your old vehicle and purchased a new one, you can transfer this NCB to your new vehicle. This will help reduce the insurance premium of your new vehicle. Therefore, even after selling your vehicle, always ensure that the insurance is in your name and ask the insurance company to give you a no-claim certificate. You can visit the official website of IRDAI for further details. *
- Go for a deductible
If you have confidence in your driving habits, you can go for a voluntary deductible to reduce your premium. A deductible is an amount paid by the policy out of pocket at the time of claim. There are two types of deductibles. The first is a compulsory deductible and is a mandatory payment in the event of a claim. The other is a voluntary deductible and can be chosen to include or leave out of your policy. While having a voluntary deductible can raise the amount you would have to pay at the time of a claim, it decreases the car insurance prices for you. *
- Concession for inactive vehicles
You can also increase your insurance coverage if for some reason your vehicle must be taken off the road and is not in use for a long time. The provision allows you to reduce your insurance cost by extending the motor insurance cover for the period when the vehicle is not in use. However, to avail the benefit, you must inform the Regional Transport Office (RTO) of your area. *
- Choose add-on covers carefully
Motor insurance offers a variety of add-on covers ranging from zero depreciation to engine cover. These add-ons are optional and are provided to enhance the basic coverage of the policy. By choosing add-on covers carefully, you can reduce the cost of your car insurance while increasing the coverage. For example, since the cost of depreciation is lower in the first few years of ownership, you can reduce your motor insurance premium by choosing a zero-depreciation cover from the second year. To get an accurate idea of how add-ons can affect your car insurance premium, you can use a car insurance calculator. *
- Avoid small claims
The biggest disadvantage of a small claim you make is that you lose the specific benefit of the No Claim Bonus (NCB). No Claim Bonus is a bonus for each consecutive ‘claim-free’ year during the policy term. NCB can reduce your car insurance premium up to a maximum of 50%; So, your next year’s premium will rise to a 50% hike.
If the claim amount is very small, the best option is to make minor repairs at local workshops. This is because sometimes the total amount claimed can be less than the processing charge and NCB loss. If the repair amount is less than the NCB, you can pay it and avoid losing your NCB. *
* Standard T&C Apply
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.