Finance

How to Cut Car Insurance Premium Costs?

Buying a car insurance policy is indeed mandatory as per the Motor Vehicles Act, 1988. However, people avoid purchasing it because of the high premium costs that must be paid. You must’ve worked hard to earn money and wouldn’t want to spend it on paying high premiums as you already have other things to look after such as utility bills, school/college fees, grocery bills, etc.

Paying insurance bills can put a hole in your pocket and disturb your monthly budget as well. However, you cannot even avoid it for the sake of your safety as well as for protecting your vehicle in the case of accidents. Fortunately, you don’t have to worry as there are tips and tricks which can help you save on your car insurance premiums easily.

1. Analyze voluntary excess

The sum that the insured is supposed to pay in the case of an accident is known as a voluntary excess. If your excess is zero, you will receive the entire claim amount in the case of an accident. If your policy has a voluntary excess, then you must pay this amount, while the balance amount will be paid by the insurer.

Your car insurance premium depends on how high your voluntary excess is. The higher the amount, lower will be the car insurance premium and vice versa.

2. Compare insurance premiums online

When insurance companies are willing to offer you cheap car insurance, then why go for an expensive one that doesn’t even provide you with appropriate coverage? Therefore, they say research is the key. After you’re done browsing the internet, compare the policies that you’ve shortlisted. The premiums of various policies will differ according to the type of cover you’re selecting as well as the extent of the cover.

Another thing you must be aware of is that the premium amount increases automatically as soon as you add features and covers to your policy. Before purchasing, make sure to go through the policy document thoroughly because it consists of important details.

3. Renew your policy before it lapses

If you forget to renew your car insurance policy on time, it will lapse; this means you won’t be able to enjoy the benefits of the no-claim bonus. Insurance companies might send you a reminder to renew your policy or you can simply have a reminder yourself.

4. Avoid raising claims on small damages

The cost to repair minor scratches or dents on your car is not much. However, people still make the mistake of raising claims for even small damages caused to their car, which results in losing the benefit of the no-claim bonus (NCB). You can pay for small damages yourself and keep the insurance for emergency purposes or major damages only. Also, you must know that the NCB only increases with each claim-free year. This means that if you do not make claims for a long time, you will be able to save on insurance premiums.

Another easy way to cut down on your premium cost would be to calculate the premium online using a car insurance calculator. With its help, you can decide for yourself if you are getting the desired coverage at an affordable price.

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