Your Complete Guide to Save Money on Car Insurance Policy Renewal

In order to provide an extra layer of protection to his car, Mr. Kabir bought a motor insurance policy. Time passed and his insurance policy’s expiry day was about to come. At the time of the policy renewal, his insurer offered renewal at the same premium. But, he didn’t want to pay such a high premium. He wanted to save money while renewing his car insurance plan but he had no idea how to do so. He discussed his situation with his office friends to seek their advice. They offered him the perfect solution. Mr. Kabir was so happy to know about the way to save money while renewing his car insurance plan. Read on to know what he did.

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What is a Car Insurance Plan?

A car insurance plan is a yearly insurance plan that is supposed to be renewed periodically. There are some tips that help you to save some money while renewing your car insurance plan, which is exactly the same as owned by Mr. Kabir too. Here are those tips:

1. Go Online and Compare the Various Motor Insurance Plans

The online insurance aggregators give you the perfect platform for the renewal of your car insurance policy. All you got to do is visit the website of your preferred aggregator and check out the insurance plans available. Once you have gone through all the insurance plans, compare the plans you liked and then shortlist your preferred plans. Ideally, the best plan should offer you the adequate safety and protection at a competitive price. Mr. Kabir did this and so can you.

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2. Calculate the Correct Insured Declared Value

Insured Declared Value (IDV) is known as the maximum sum assured of your motor insurance policy. Insured Declared Value is computed by making an adjustment to the market value of your vehicle minus depreciation. IDV is the sum of money that is paid to you in case your vehicle is damaged beyond repair (i.e. the case of total loss) or it is stolen. IDV is coordinated well with the premium. If your IDV is higher, your premium will also be higher.

Mr. Kabir was wise enough to compute the correct IDV. Then he selected a policy that offered him the calculated IDV and he got to save his money, as he didn’t have to pay a higher premium.

3. Use your Accumulated NCB

At the time of renewal, a policyholder is entitled to enjoy a discount for being a good rider in the form of No Claim Bonus if he/she doesn’t file any claim for his/her car. The No Claim Bonus hikes up to 50 percent every claim-free renewal. The NCB is a good option to enjoy a discount at the time of the insurance renewal.

4. Opt for a Higher Limit of Voluntary Deductible

Every motor insurance plan offers the liberty of selecting a voluntary deductible limit. This limit signifies the claim amount that a policyholder has to bear from his own pocket. If he files a claim, he has to pay the limit of the voluntary deductible and the insurer will pay for the remaining amount. The voluntary deductible offers you a discount on your premium. Mr. Kabir didn’t have any voluntary deductible limit in his current insurance policy. But, at the time of renewal, as per his friends’ advice, he opted for a deductible worth Rs. 1500 and got a discount on the premium.

5. Become a Member of Automobiles Association of India or Western India Automobile Association

If you have a membership of Automobiles Association of India or Western India Automobile Association, then your insurer offers you a discount on the premium. Insurers offer a premium discount if you have a membership of AAI or WIAA.

As advised, Mr. Kabir became opted for the member of AAI and got a discount on the premium and saved his hard-earned money.

6. Install Anti-theft Device

Improving the safety of your vehicle always helps. When you improve the security of your vehicle by installing any anti-theft device, you can get discounted premiums, as your vehicle becomes less prone to theft.

7. Renew your Insurance Plan on Time

When you don’t renew your motor insurance on time, you miss out on the No Claim Bonus as your policy lapses and become inactive if you don’t renew it within 90 days of its expiry. Mr. Kabir was well aware of this fact and he renewed his insurance policy before the due date and got 35 percent of NCB.

Buying motor insurance is not enough; renewing your insurance policy is very important. When you follow these tips, your renewal becomes economical. Save your hard-earned money with the help of these tips and put that money to the best use.

You may like to Read: 10 must Knows of Car Insurance Renewals

 

Written By: PolicyBazaar - Updated: 13 July 2021
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