11 Tips to Negotiate for Lower Car Insurance Premium
It is mandatory for all car owners in India to have a car insurance policy for their four-wheelers. Whether you are getting third-party insurance or a comprehensive cover, you must make sure that you are getting the best deal possible. For this, you must know how to negotiate on car insurance premiums effectively.
Tips to Negotiate on Car Insurance Premium
We do not put much effort while selecting a motor insurance policy. If your car is insured, your policy will offer you financial assistance in case of a mishap, such as a car accident or third party property damage. Therefore, it becomes important to buy an insurance policy for your four-wheeler with a premium that fits your budget.
Here are 11 tips that you can follow to lower your car insurance costs:
1. Compare Insurance Rates
Many car insurance companies in India offer attractive insurance rates. However, not all of them provide the right coverage for your car or fit within your budget. Thus, to choose the best policy, you must do some prior research. Comparing rates online can be an efficient way to choose the right motor insurance for your car.
For this, you must first understand your requirements and then compare insurance quotes offered by different companies online. Based on the coverage offered and the premium amount, you can choose the right policy for your car. A little research can go a long way in offering you the most economical insurance policy.
2. Ask for Higher Deductibles
Another step to negotiate on insurance rates is by increasing your voluntary deductibles. A car insurance deductible refers to the amount that a car owner voluntarily agrees to pay for car repairs and other expenses in case of a claim. Opting for a zero voluntary claim deduction will allow the owner to claim the entire sum from the insurance company. But if a car owner agrees to pay a certain sum as a voluntary deductible, the insurance company will pay the remaining amount in the event of claim settlement. In such a scenario, the car owner will be entitled to a lesser premium amount as he/she helps to reduce the insurer’s liability.
Thus, if a car owner wishes to pay a lower premium, he must select a higher voluntary deductible. The higher the deductible amount, the lower will be the premium of the policy. Make sure to opt for a voluntary deductible that you can afford to pay during claim settlement.
3. Drop Comprehensive Cover for Older Cars
When choosing motor insurance, you must also consider the condition of your car. If your car is old, you can go with buying a third-party insurance cover rather than a comprehensive one to save up on your premium amount. If your car is more than 5 years old, then purchasing a comprehensive cover may not be a cost-effective option. Thus, you should choose only the mandatory third-party insurance to cover your old car.
4. Avoid Additional Modifications
The value of a car increases with every new modification that you do, which in turn also increases your insurance cost. A higher value of the car results in a higher premium amount as the liability of the insurer increases. Thus, it is suggested that you must try to avoid any unnecessary modifications in your car if you want to reduce the amount of premium for your four-wheeler insurance.
5. Reduce Premium by Saving on Add-ons
To further reduce your premium, you can also avoid purchasing any unnecessary add-ons along with your four wheeler insurance policy. When you purchase insurance for your car, you also get a chance to purchase add-ons or additional covers that can increase your coverage. However, the more add-ons you add to your cover, the more will be your premium amount.
Therefore, you must only choose the add-ons that you absolutely need for your car so that you can negotiate on insurance premiums.
6. Keep a Clean Driving History
Another factor that creates an impact on your car insurance rate is your driving history. No insurance company would want to give coverage to a person who has had a record of accidents or breaking traffic rules. Thus, maintain a good driving record because a bad record can increase your insurance premium. Moreover, some insurance companies offer discounts to car owners having a good driving record for an extended period.
So, if you want a reduction on your premium, make sure to maintain a good driving record by following all traffic rules.
7. Not Allow Your Policy to Lapse
A motor insurance policy usually expires within one year of purchase, unless you have a brand new car with a three-year policy tenure. Once it expires, a car owner must renew the policy to claim any coverage. If the owner forgets to renew the policy before its expiry, the policy lapses. As a result, the insurance company charges an extra premium for the period you have been driving with the lapsed policy. Thus, to save yourself from paying an extra premium, you should renew your policy before its expiry date.
Also, you may earn a hefty fine for driving an uninsured car. Moreover, you will lose your No Claim Bonus (NCB), if your expired policy is not renewed within 90 days.
8. Take Advantage of NCB
Another option to negotiate on the insurance premium of your car is by taking advantage of the No Claim Bonus on your insurance policy. A No Claim Bonus refers to the discount on the renewal premium that you get if you do not file a claim in the previous policy year. Thus, if your car requires minor repairs, which you can afford to pay out of your pocket instead of claiming your policy, you will be able to build your NCB. If you save your NCB for five subsequent years, you can get a discount of up to 50% on your renewal premium.
Therefore, by avoiding claims for minor damages to your car, you can reduce your premium with the help of your No Claim Bonus discount.
9. Install Security Devices
Security devices like anti-theft devices are installed in cars to protect them from any theft or robbery. By installing an anti-theft device in your car, you will be able to reduce the chances of your car getting stolen, which will also reduce the chances of making insurance claims. As a result, insurance companies offer discounts on premiums to car owners who have installed anti-theft devices in their cars as they reduce their liabilities.
You can install security devices, like anti-theft alarms, brake locks, steering wheel locks etc, to keep your car safe and save up on your premium. However, make sure to only install devices that are authorised by the Automotive Research Association of India (ARAI).
10. Switch to Pay As You Go Car Insurance
If you are an occasional, low-mileage driver, then choosing a pay as you go car insurance policy can be the best choice for you. Pay as you go policy calculates the premium based on the total kilometres a car covers during the policy tenure. The insurance company will only charge a premium based on the kilometres that your car has actually covered.
Thus, with this type of motor insurance, you can save on your premium by only paying for the distance that you drive. This way you will be able to negotiate on insurance prices with ease.
11. Maintain a Good Credit Score
Apart from a driver's record, some insurance companies also consider the driver's credit score/ratings while determining the insurance premium. If your credit score is not good, you might end up paying a higher premium on your car insurance policy. Therefore, you must ensure that your credit score is high so that you do not have to pay higher insurance costs.
Purchasing an economical insurance policy is the best option to protect your car financially from unpredictable events, such as accidents, damages or major repairs. Additionally, you must know the above-mentioned tips on how to negotiate your insurance rates so that you do not end up paying a higher insurance premium for your car.
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