By Paras Pasricha
Saving on motor insurance premium need not necessarily translate to compromising on coverage. You can adopt a few smart ways to lower your motor insurance premium while still ensuring comprehensive coverage for your new car.
Avoid opting for bundled deals
While it’s both tempting and convenient to walk out of the showroom with a bundled car insurance deal, this could lead you to higher premium. Bundled deals often come with fewer customisation options and may not offer the best value for your specific needs. By comparing policies online, you can explore a wider range of offerings that suit your budget without compromising on coverage.
Understand deductibles
Deductibles are an essential part of your motor insurance plan and directly impact your premium. The higher the voluntary deductible you opt for, the lower your premium will be. For confident drivers who are less likely to make claims, selecting a higher deductible can mean immediate savings. However, there is a mandatory deductible of`1,000 for most cars. Strike the right balance between deductibles and risk tolerance to reduce your premium without leaving yourself vulnerable in the event of a claim.
Evaluate add-ons carefully
Add-ons enhance the coverage of your motor insurance policy, but they also come at a cost. Instead of selecting every available option, focus on those that are relevant to your circumstances. For example, if you live in a region prone to heavy rains like Chennai or Bengaluru, add-ons such as engine protection or consumables coverage might be essential, as they can help you avoid large repair costs in case of water damage.
Driving less? Go for ‘Pay as You Drive’
If you are someone who doesn’t frequently hit the road, the innovative ‘Pay as You Drive’ (PAYD) model is definitely worth considering. You pay a lower premium when you drive less, which can result in substantial savings. Some insurers even allow you to “turn off” your insurance on days when your vehicle is not in use, while others follow a distance-based slab.
Get the best out of no-claim bonus
A no-claim bonus (NCB) is one of the most popular ways for cutting down on insurance costs. If you are buying a second car, you can transfer your NCB from your old car to the new one ensuring significant savings. Also, for every claim-free year, you accumulate a bonus that leads to reduced premiums. For instance, insurers typically offer a 20% discount after the first claim-free year, which can go up to 50% after five years. This is a substantial saving, but it is crucial to maintain your NCB by avoiding claims for minor repairs and renewing your policy on time. Additionally, many insurers offer an NCB protector, an add-on that allows you to retain your NCB even after making a claim.
The writer is head, Motor Insurance, Policybazaar.com
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