Buying a car is everyone’s dream but owning a four-wheeler has its challenges. There are many other ways in which owning a car could become a big responsibility. If you think we’re hinting at the maintenance cost of four-wheelers, you’re mistaken. Besides maintenance, you will also have to shell out money over car insurance. It is mainly of two types: Third-party and Comprehensive. The former covers for damages and injuries sustained by a third party in an accident, while the latter covers for damages to the insured car. However, there are other methods of reducing the financial liability that comes with car insurance premiums.
Even though Third-party insurance generally comes with fixed premiums and is mandatory as per the Motor Vehicle Act of 1981, the premium amount could vary from one plan to other. This difference could be due to the kind of coverage a plan provides. Therefore, it is possible to customize your plan and drop its premium amount through thoughtful pick-and-choose. Here is a list of five ways to save on your car insurance premium.
Pay As You Drive car insurance is part of the pilot sandbox project of IRDAI and it came to effect in 2020. It has a policy tenure of one year and is a more affordable option where the own damage premium depends upon the total kilometres covered. This is done by installing a device on the car to track mileage and driving behaviours such as braking, acceleration, cornering or times of day a car is driven. Pay As You Drive car insurance can lower the cost of insurance and is great for people who do not drive regularly.
It is advisable to go for comprehensive car insurance for your new car as it provides holistic coverage for your vehicle. However, it may make more sense in getting only third-party insurance if the value of your car is not much or it is an old car. This is a great way of saving money that can be better utilized for the benefit of your car. It is observed that people usually spend less on the repairs of such cars, than the premium they pay for the premiums of comprehensive car insurance.
Since not every damage is covered under a basic insurance plan, we need the help of add-ons to secure our precious cars. Add-ons boost the scope of car insurance policies and provide in-depth coverage to millions of car owners worldwide. However, this protection comes with an additional cost. Additionally, sometimes people end up with add-ons that they can do without. That’s why it is essential to gauge your requirements while getting add-ons. It is a good way of saving on premiums and keeping a tab upon the purpose of your expenditure.
Whether it’s installing a CNG kit or an electronic device, before altering your car in any way you need to inform your insurer. This has direct implications on your premium. Moreover, your claims may be rejected later if you do not inform your insurer before making any modifications. It is so because modifications increase the risk of theft. Hence, modifications to car parts such as wheels, car interiors or paintwork must be avoided. Additionally, any change in engine or mechanics for enhanced acceleration may also have similar implications.
It is advised to not raise claims for minor damage to the car like scratches or small dents. By doing so you lose your eligibility over your No-claim Bonus or NCB at the next renewal. NCB is a discount in premium that is awarded to policyholders by insurers for not filing any claims during the policy years and ranges between 20-50%. For availing of this benefit, you need to renew the policy within 90 days of expiry.
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