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Complete Guide to Cutting Down Car Insurance Premiums

​In India, you cannot use a car without car insurance. Mostly, people opt for third-party car insurance. To get insurance coverage, you must pay a premium to the insurance company. It is one of the primary factors people consider when buying a policy. A car insurance premium calculator can help you decide premium-wise which policy works better for you. Everyone wants to save as much as possible, so it is only natural to want to know how to cut down on insurance premiums.

Here are some ways to lower car insurance premiums:

  • Increase the deductible component

  • A deductible is an out-of-pocket amount the policyholder pays when they file a claim. Increasing your deductibles or voluntary deduction can lower your insurance premium. When choosing deductibles, choose an amount you can pay comfortably rather than going overboard. While having a zero deductible means you can get the entire claim amount if there is an accident, it also means a higher premium.

  • Avoid making claims for small expenses

  • Skip filing claims over minor issues such as broken tail light or headlamp because the amount for such repairs is much lower than the no-claim bonus (NCB) policyholders are entitled to for every claim-free year. When you renew your auto insurance policy, the NCB amount is deducted from the premium, thus reducing the premium.

  • Skip modifications
  • Car modifications such as adding spoilers, alloy wheels and expensive gadgets like ultrasonic sensors may mean a higher premium. If you want to maintain a low premium, avoid getting such gadgets and modifications. However, if you plan to go ahead with modifying your car, inform your insurer about it. Failure to do so may lead to the insurer invalidating your insurance policy.

  • Invest in safety devices
  • Installing safety devices such as anti-theft alarms, airbags, and the like decreases the possibility of the vehicle getting stolen or damaged. Investing in these features can help you get a discount of at least 5% on your annual insurance premium.​

    Factors influencing auto insurance premiums

  • The geographical location of the insured
  • Your geographical location vastly influences your auto insurance premium. If you reside in an area where there is less traffic, the premium rates will be lower. Premiums are higher in metro or big cities where there is heavy traffic irrespective of the time of the day.

  • Engine type
  • A car that runs on diesel will attract a higher insurance premium than those running on CNG or petrol. The reason is that diesel-engine cars are expensive and their Insured Declared Value (IDV) is higher.

  • Customised insurance plan
  • An insurance policy tailored to suit your needs will have higher premiums. Many insurance companies offer car insurance plans customised to provide only those benefits that the individual needs such as personal accident coverage.

  • Coverage type​
  • The benefits and coverage your policy provides also influence the premium. For instance, comprehensive car insurance​ coverage plans have higher premiums because they offer several benefits to the policyholder.

    Auto insurance offers you a safety net if your vehicle gets damaged due to any reasons covered by the policy. Since you cannot avoid getting car insurance but have to keep your finances in check, remember these tips to save big bucks on premiums.