Car insurance: Safety net

Sep 07 2013, 13:44 IST
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Forget about being in an accident for a while. Consider being stranded in the middle of nowhere with no money for fuel or to spend a night at a hotel. AP Forget about being in an accident for a while. Consider being stranded in the middle of nowhere with no money for fuel or to spend a night at a hotel. AP
SummaryDon’t get stuck in the confusing world of car insurance and claims. We give you tips and tricks to protect yourself better and save money while you do it

Being in a car accident is one of the worst things that can happen to you. And with the kind of unruly drivers on the road, who contribute to our dismal road safety record, every day is, quite literally, a battle. But most people drive content knowing there is the safety net of their car’s insurance to pay for damages. But is just getting car insurance the only thing you need to worry about? Have you ever wondered just how well insured your car is? What if you are asked to foot a big chunk of the bill despite being insured? Have you ever read the fine print?

Forget about being in an accident for a while. Consider being stranded in the middle of nowhere with no money for fuel or to spend a night at a hotel. Did you know you can get yourself covered for eventualities like these? We bet you didn’t. So, we have listed out everything you can protect yourself against. Let’s start with how you can save money on insurance.

Saving on insurance

Lower the insurance premium: The premium you pay on the insurance of your car is directly related to the insurer declared value (IDV). Simply put, the IDV is the the value of the car. So, in case your car is written off, this is the amount that you will receive from the insurance company.

The IDV is calculated by the insurance company based on the market price of the model and taking into account the car’s age. This value decreases by an average of 10% every year, but as the owner, you can choose to reduce the IDV and in turn reduce the premium amount. The thing to remember here is, the lower the IDV, the lower the pay-out in case of total loss.

Another way to reduce the premium is by paying voluntary excess. The excess is a part of the damage that is paid by the car owner and is a permanent part of the insurance. Voluntary excess on the other hand is the option to choose to bear an amount of repair cost in exchange of a lower premium. We recommend not going in for too high an excess. This can be counterproductive in case of an accident.

Insurance discount: Then there are some discounts that the insurance companies offer themselves. The most common amongst these is the no-claim bonus (NCB). If you have not

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