Buying A New Car? Here’s How You Can Reduce The Premium On Your Car Insurance

Whenever you buy a new car, your car dealer will present you with varied sops that will come with an insurance policy which very often may be free for a number of months or a year. In this situation, you still need to evaluate what are the inclusions in this policy and what is missing. This blog presents a checklist of factors that can help reduce your car insurance premium significantly.

If you’ve got a free car insurance policy on your new buy, then know this that it may not cover everything. Damages owing to manmade and natural disasters like riots, cyclones, floods, landslides etc., may not be covered in this policy. Also, the free insurance may not be free after all, as the insurer would have recovered the cost of your premium via the money you gave to your dealer for buying your car. In this situation, it’s advisable to read the fine print carefully and evaluate whether you really need that freebie. This is because you could buy a separate insurance cover and get a discount on your car instead.

Whenever your car suffers damage, then the cost borne by you is known as a deductible. It comes in two forms: a voluntary and a compulsory deductible. In the latter, you pay a certain amount like Rs 500 while the rest of the claim is paid by your insurer. In a voluntary deductible, you can reduce the car premium. However, in the event of a claim, you have to pay a significant portion of the claim yourself. So you have to be sure of which deductible you’re opting for, and what exactly it entails. The other thing is that you can consider opting for a voluntary deductible only if you’re sure that you’re an ace driver and the likelihood of an accident is almost none.

It’s always advisable to buy an insurance policy via an online aggregator rather than an insurance agent. This not only saves you time and scales down effort, it also helps you compare premium rates of all policies and zeroing into one that suits all your requirements. Online research and analysis will also help reducing your insurance premium not only in the first year, but also in the following years as well.

The Insured declared Value (IDV) of your car, is yet another significant factor to dwell upon. This essentially means, that the higher the value of your car, the higher is your policy premium. Some people choose to declare a lower value of their car to have a lowered premium rate. But the catch here is that if your car gets stolen, then your claim gets reduced too. However, a lower IDV doesn’t impact claim in case of an accident.

Voluntary declarations like usage of your car, driving records and other facts may scale down your premium to as low as 10%. Certain moves like becoming a member of the Automobile Association of India and installing car safety devices can put you in the category of a safe driver and reduce your premium. A no claim bonus - where you’ve not made any claims for the insurance duration - too works in your favour.