Most people give a lot of thought while purchasing a vehicle, but not so much while purchasing vehicle insurance. Here's how money can be saved while renewing auto insurance.
Most people give a lot of thought while purchasing a vehicle, but not so much while purchasing vehicle insurance. This can be attributed to their perception of insurance industry being complex, lack of information, paucity of time, negligence, and negative experiences associated with claims. The auto insurance industry has taken notice of these challenges and revamped their functioning for a hassle-free insurance experience by going digital. This digitization is good for the policyholders as it empowers them to make an informed choice, choose an apt policy and save money in the process. Here are 5 tips to save money while renewing auto insurance:
1. Choose a Digital-first Insurer
Digital-first insurers have made auto insurance simple and convenient. You can purchase or renew auto insurance from their website just as you purchase any item from your favorite e-commerce website. They offer auto insurance policies at a lower price without compromising on the extent of the insurance coverage. They can afford to do so because they are an Internet-only insurer and sell policies directly to the customer. This way, they save a lot on operational cost and transfer a part of that savings to the customers in the form of affordable policies. They offer a paisa vasool insurance experience by providing low-priced policies in a convenient manner and guaranteeing a stress-free claim settlement process.
2. Review Your Coverage
First-time car and bike owners generally purchase an insurance policy that is suggested by their vehicle dealer. This cover might not be ideal. You should review your auto insurance policy’s coverage while buying and renewing it. There is no need of going for riders that are not going to be beneficial for you. For example, a Passenger Cover rider is inconsequential if you travel alone. Such add-ons increase the cost of your insurance policy. Thus, it is suggested to choose only those add-ons that add value. Reviewing your coverage and choosing only relevant add-ons can save money while renewing auto insurance.
3. Don’t Forget Your Bonus
Vehicle owners are rewarded with a No Claim Bonus (NCB) by their insurance company for not raising a claim during the policy period. NCB is offered as a discount on auto insurance premium while renewing the policy. This NCB is incremental in nature and can go as high as 50%, provided you do not raise a claim for five consecutive years. Make sure your insurer has included this discount (if applicable) on auto insurance renewal.
4. Renew on Time
Your insurance company might want to inspect your vehicle before renewing its insurance if you have failed to renew the policy before its expiry date. This might increase your auto insurance policy’s premium. If you do not renew your policy within 90 days after its expiry, you will lose out on the accumulated NCB (if any) as well.
5. Install Anti-theft Device
Installing an anti-theft device on your vehicle can not only act as a precautionary measure against theft, but also reduce your auto insurance premium. Insurance companies provide a discount on insurance premium if you have installed an anti-theft device, provided it is certified by the Automotive Research Association of India.
Ensure To Insure
Driving a vehicle without a valid insurance policy is a punishable offence in India. An expired auto insurance policy is considered invalid. Thus, you have to keep renewing your policy from time to time to keep it active. It is a good practice to renew your auto insurance policy at least a week prior to its expiry date to avoid last-minute hassles.
(By Animesh Das, Product Strategy Head of ACKO General Insurance)