As per the Motor Vehicles Act, 1988, a valid motor insurance providing third-party liability cover is mandatory for all vehicles on public space in India. The number of deaths as a result of vehicular accidents is high in the country. Accidents can't be predicted but we can be prepared for such an eventuality. No matter how good a driver you are or how well you maintain your car, accidents can happen as a result of bad road conditions or a natural calamity.
A car insurance policy can protect you against any financial crisis arising out of unfortunate events like motor theft, third-party liability damage, accidents, natural calamities, etc. There are 2 main types of car insurance plans available in India:
- Third-party liability coverage: This type of insurance policy offers coverage against any damage caused by you to a third-party which includes damages to the person and the vehicle. Third-party liability cover doesn't include damage to you or your car.
- Comprehensive coverage: In addition to third-party liability, this type of policy offers coverage against damages to you and your vehicle, theft, fire, in-transit damage, or damage caused by a natural calamity.
Now that you are aware of the importance of having a valid motor insurance policy, here are some tips to help save money on your car insurance.
How can you lower your car insurance costs?
Insuring an old car is cheaper than insuring a brand new car. Since having a motor insurance coverage is mandatory, it helps to find out ways to save on your car insurance costs. When it comes to car loan and car insurance, it is always beneficial to shop around, do your research in order to get a good deal.
- Compare car insurance online: The easiest and cost-effective way of comparing car insurance online is to visit a third-party comparison website that has a list of features and benefits of various policies offered by the top insurers in the country. You can also get instant car insurance quotes online with a few clicks of your mouse. Go paperless to get a good discount on your chosen car insurance policy.
- Choose a reputable insurance provider: Saving on insurance costs doesn't mean just paying low premium but also choosing an insurer who offers 24/7 road assistance, cashless network garage facility, and hassle-free claim processing. Check the insurance company's Claim Settlement Ratio (CSR). A high CSR indicates the insurer's capability to settle a high number of claims in a year.
- Choose a higher deductible: Settling for a high deductible will lower your insurance premium. Deductible in car insurance is similar to that of co-pay in health insurance, wherein the insured person pays a certain percentage of the claim amount while the insurer pays the rest of it.
- Review your car insurance coverage needs: Ensure you are adequately covered in the case of a major accident so that your savings are not at risk.
- Purchase multiple insurance from the same insurer: Multiple insurance policies like life insurance, health insurance, two-wheeler insurance, and car insurance from the same insurance company can result in you getting a fairly good discount.
- Insure an older driver to get a lower premium rate: Depending on the age of the driver, your car insurance premium can be higher or lower. Insurance companies consider young drivers to be high risk and therefore, charge a higher premium.
- Choose your new car carefully: When choosing a car of your dreams, choose carefully as the make and model of the vehicle is also a major factor in deciding your insurance premium. Remember, with a good credit score you can get a lower car loan interest rate to purchase your dream car.
- Transfer your NCB: Don't forget to transfer the accrued No-Claim Bonus and other benefits of your existing policy when you are selling your old car and getting a new car.
- Install safety features in your car: Installing safety equipment like alarm and immobiliser in your car can help you get a good discount on insurance costs.
- Don't make claims for minor damages: If you make claims for small damages, you will end up losing out on your No-Claim Bonus (NCB). Insurance companies reward customers with NCB for claim-free years wherein you can use the accrued NCB to get a discount on your insurance premium.
Lastly, renew your car insurance policy on time in order to enjoy continuous coverage and policy benefits as well as to avoid a higher premium.