With ever increasing fuel rates which is making driving a car an expensive proposition, car insurance premium too holds a major portion of one’s car budget.
With ever increasing fuel rates which is making driving a car an expensive proposition, car insurance premium too holds a major portion of one’s car budget. If you are able to reduce an insurer’s perception of your risk, you will get the benefit of reduced price. However, there are many factors you can’t change easily like age, driving history and living place.
However, here are seven things which can be controlled to reduce your car insurance premium.
Think about bigger profits
Many insurance companies pay discounts up to 50% on the hefty premiums as no-claim bonus. So, pay for minor damages yourself. Avoid making small claims as this will affect your bonus. If you don’t claim on an insurance policy then you are entitle for an annual discount which amounts a substantial difference to the overall cost.
Go for a higher deductible
A deductible is the amount of a covered loss you agree to pay before the benefits of your policy are applied. In many cases, a higher deductible could mean a lower premium, but would also mean paying more out-of-pocket in the event of a loss. If you are a safe driver or you don’t drive your second car too often, then the probability of damage or accident is also low, then you can opt for higher voluntary deductible.
Choose the right policy
There are certain riders in the policies which you are never going to make use of, so there is no point in paying for it. Save money by getting the right policy for you. Instead of blindly opting for various add-on covers choose them carefully according to your priority and their relevance to your requirements.
Theft device will get you a discount
Accidental damages and theft add a bulk to insurance costs. If you leave your car in a garage or driveway it means theft and accidental damage is less likely, resulting in a 3% – 7% drop in insurance costs. Purchasing a vehicle with a theft deterrent system or having one installed will most often get you a discount.
Be a loyal customer
Loyalty can be rewarded when it comes to sticking with your auto insurance company. Find out the loyalty bonuses or offers which your existing insurer is offering. Your long association with a particular insurance company will help you in fetching a cheaper policy. Having multiple insurance policies with the same company will also get you a hefty discount.
Drive like an angel
Believe it or not, your driving record is one of the top factors that insurance companies look at. Whether you’ve been in an accident or received a major traffic violation within the last few years can have a huge impact on your premium. If you drive less miles you will be entitled for a lower premium by the insurance companies.
Ensure that you pay your premiums timely and get the policy renewed before the due date. Any delay could lead to losing your no-claim bonuses/discounts and can also lead to lapse of the policy.
Although there are factors which are beyond your control when we talk about car insurance premium, the good news is that we have discussed those factors which are absolutely in our control and can minimize the amount of premium drastically.
Ramalingam K is director & chief financial planner, Holistic Investment Planners Extracted from Tax Guru