Purchasing car insurance is compulsory but paying a high price for it is not. Several factors determine the price you pay for insuring your four-wheeler. Starting from your car’s model, to the add-ons you select, everything influences the cost of insurance. Understanding these factors and managing them smartly can keep a check on your insurance premiums. Your car insurance policy can then provide comprehensive protection without burning a hole in your pockets.
Here are seven strategies that you can adopt to save money on car insurance.
- Compare policies before making a purchase
The rates of car insurance can vary quite a bit from provider to provider. Whether you are buying a policy for your new car, or just renewing the one you already had, it is important to analyze the rates. These days, most insurers deliver quotes for car insurance online. You can browse through online portals and make the most of these tools to collect information on premiums. Once you have quoted premiums at hand, you can compare insurers. In the process, you will also have a chance to weigh the premiums against the benefits offered and opt for the policy of your preference. Smart comparisons can help you arrive at a policy that allows you significant savings.
- Make the most of the No Claim Bonus feature
A No Claim Bonus is often offered as an add-on feature with car insurance policies. It makes you eligible for a discount on the upcoming premium, every time you have a claim-free year. The best part is that you can accumulate this bonus over the years. With a bonus earned over five years (which is the limit), you can save up to 50 per cent on your car insurance premium. In fact, you can transfer the accumulated bonus even if you change your insurance provider or buy a new car.
Thus, a No Claim Bonus is a vital tool when it comes to reducing your car insurance prices. However, to enjoy the benefits, you may have to forego small claims. Paying out of your pocket for minor expenses like the repair of dents and scratches helps. You can also try to better your driving skills and reduce the chances of damage to your car in the first place.
- Evaluate the coverage and re-assess the add-ons
Irrespective of whether you have opted for simple coverage, or comprehensive coverage, you will have to evaluate your car insurance policy every time you are renewing it. Ideally, insurance coverage should change according to the changing needs of the vehicle and the driver. The add-ons you opted for in the beginning might not be a necessity anymore. By opting out of these unnecessary riders, you can cut down on annual premiums. At the same time, there could be other add-ons that might prove to be value-additions. For example, if you are using your four-wheeler less often these days, you might benefit from an add-on that covers your daily allowance.
A thorough evaluation on a regular basis allows you to optimize policy coverage. The optimization directly translates into a drop in four-wheeler insurance prices.
- Consider the Insured Declared Value (IDV)
Insured Declared Value or IDV is the maximum value of the claim you can make for the vehicle you have insured. Simply put, it is the claim amount that your insurer decides by factoring in the current market value of your car. The IDV plays a crucial role in determining the car insurance prices for your vehicle. The higher the IDV, the costlier will be the premiums. However, an extremely low IDV can also prove counterproductive if there is a lot of damage, and the claim value is not enough. So, it is essential that you strike a balance and maintain the right IDV.
- Look closely at the deductibles
Deductibles are the amount you contribute when you make a claim on your car insurance. You might be tempted to reduce the deductibles so that you have to pay as little as possible upon making a claim. But there’s a catch here. The lower the value of deductibles, the higher are the premiums. Thus, choosing a higher deductible can be more financially rewarding. But, choosing a high deductible percentage will lead to you paying a huge proportion of the claim from your own pocket. So, make sure that you strike the right balance.
- Prevent your insurance coverage from lapsing
Renewing your car insurance before it expires can enable you to lock your premium rates for the next term before new car insurance rates come into force. This helps reduce the burden of premiums to a certain extent. Since insurance coverage for cars is compulsory, there is no harm in booking your policy in advance. Rather, it has many benefits. The policy becomes active only after the existing one expires. So, you enjoy consistent coverage without any gaps. With online car insurance policies, the process of renewal has become convenient and quick. With a few simple steps, you can renew your policy from the comfort of your home and save costs.
- Enhance the safety of your cars with anti-theft installations
Installing anti-theft devices in your cars has benefits that go two ways. First, it reduces the chances of your vehicle being stolen. Second, the reduced risk of theft results in reduced car insurance premiums. Therefore, making a one-time investment towards ensuring your car’s security can provide long-term returns in the form of reduced four-wheeler insurance prices.
When it comes to car insurance, the bottom line is to look for efficient coverage at reasonable rates. Do not let the premiums prevent you from opting for the insurance coverage of your choice. Instead, make smart choices and enjoy optimum benefits at pocket-friendly prices.