If a car is mostly unused or has little to no economic value, no one likes to pay a high insurance premium. Additionally, since third-party car insurance is required by Indian law, you cannot, as the car’s owner, let the policy lapse or keep the vehicle uninsured.
How Can I Reduce A High Car Insurance Premium?
As an owner, you want to pay a fair premium that meets all your insurance and legal requirements. Let’s examine all the ways you can reduce the cost of your car insurance. But first, let’s discuss how the premium amount is determined.
Calculating The Cost Of Car Insurance
The following variables affect your car insurance premium. Let us learn how car insurance premiums are calculated.
• Insured Declared Value (IDV) Of The Vehicle: In the event of a total loss of a vehicle, the insurance company will pay the IDV, which is the highest amount insured. It is additionally regarded as your car’s official current market value. The IDV is modified annually for everyday wear and tear, depreciation, and other factors.*
• Vehicle Type And Age: In addition to the age of the vehicle, the insurer also looks at its make, fuel type, and model. The car’s age is divided into under five years, between five and ten years, and more than ten years.*
• Engine Cubic Capacity: The car insurance premium amount is also based on the car’s engine size; the higher the engine’s cubic capacity, the higher the premium rate. The three divisions are less than 1000 CC, between 1000 and 1500 CC, and more than 1500 CC.
• Insurance Type: Your premium will be impacted if you choose a third-party or comprehensive policy (third-party + own damage and add-ons). *
• Geographical Zone: Your car insurance premium is also influenced by the city or town where your vehicle is registered. India’s major cities are classified as Zone A, while the rest of the country is classified as Zone B. Due to the higher risk of theft and accidents, cars registered in Zone A have higher insurance rates than those registered in Zone B.*
These are, by and large, the critical elements used to determine your car insurance premium.
How To Reduce Your Car Insurance Premium
Compare the policies of various insurance companies online before renewing or purchasing your next car insurance policy. Compare the policy advantages and insurance premiums in at least three price quotes. To save money on car insurance coverage, buy your car insurance online rather than through a broker. When you purchase insurance online, a broker is not part of the transaction so the insurer can charge the customer less. ##
Raise the deductibles on your policy. If you increase your policy deductible, you can significantly lower your car insurance premium. The policy deductible is the sum you must pay out of pocket when filing a claim with the insurance provider. For instance, the final settlement amount will be Rs 75,000 if you submit a total claim to the insurance company of Rs 100,000 and pay Rs 25,000 out of your pocket. ##
* Standard T&C Apply
## All savings are provided by the insurer as per the IRDAI-approved insurance plan. Standard T&C apply.
Insurance is the subject matter of solicitation. For more details on benefits, exclusions, limitations, terms, and conditions, please read the sales brochure/policy wording carefully before concluding a sale.