The most common way to reduce motor insurance premium is to reduce IDV, however, experts do not recommend doing so.
Motor Insurance: Many factors decide the cost of a motor insurance policy. These include things like your vehicle, its model, its engine capacity and the type of insurance cover for it. While some people may find these rates fine, many may find them expensive. In such a situation, there is a question in the mind of many people that how they can reduce the insurance premium of their vehicle.
The most common way to reduce premium is to reduce the insured declared value or IDV. But, experts say that this is not the right method as it affects your claim amount. Especially if the vehicle is completely damaged then you suffer in it.
Here are some tips to reduce your car insurance premium:
Make full use of NCB
In some cases, if the claim amount is too low, it may be advisable not to take the claim, else you will be deprived of your No-Claim Bonus or (NCB). Therefore, at the time of policy renewal, claim only after comparing the claim amount and NCB so that you can get the benefit.
If you do not claim every year, you get a discount on the on-damage premium in the form of NCB. The maximum limit of this discount rate is 50%. For example, you get a discount of 20% in the first year, 25% in the second year, 35% in the third year, 45% in the fourth year and it reaches 50% in the fifth year.
‘Pay As You Drive’ Policies
These policies are for people who do not travel much, especially for those who work from home or have a home and office nearby. This feature can be used to get up to 30% off, in which the driving skills of the driver are also tracked. The premium rate for motor insurance for a driven car depends on the distance traveled by the insured car.
Anti-theft device discount
Insurance companies give you a discount in the premium if your car is equipped with anti-theft device as well as GPS system, safety lock for the gear.
While filling the proposal form, you need to inform your insurance company about these installations. In addition, these anti-theft instruments must have been approved by the Automotive Research Association of India.
Changing IDV and Deductibles
You can increase the deductible amount, also known as voluntary access, to reduce the cost of your policy. But remember that you have to pay the deductible amount out of your own pocket while making a claim.
Don’t let your policy lapse
If your policy lapses, you will lose out on the NCB discount that you have collected so far. So it is always advisable to renew your policy on time because if you miss the premium payment date then you will lose the benefit from NCB.
Choose Add-ons Wisely
You are charged some extra premium with every add-on. Hence, choose the cover wisely while selecting the add-on or else you may end up paying a higher motor insurance premium for coverage that is not even needed.
