A car insurance policy is a mandatory cover according to the Motor Vehicles Act, 1988. So, for those who have an automobile you must have a valid car insurance policy onto it. Being mandatory does not mean the car insurance policy would be expensive. If you, however, feel that you are paying high premiums for the car insurance plan, it is time for a reality check. There are methods in which the car insurance premium could be reduced. If your premiums are high, you need to check if you're committing any of the following common mistakes –
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Not comparing before buying
You would find most of the general insurance providers offering a car insurance plan for the vehicle. Each one of these plans differ when it comes to coverage benefits and premium rates. To ensure that you get the best premium rate you should compare first and buy later. Comparing not just lets you lower your premium expense, additionally, it enables you to pick the desired coverage benefits. So, if you are purchasing a policy without comparing, you're definitely making a mistake which makes auto insurance expensive.
Here's why you can purchase car insurance online
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Choosing the wrong type of policy
Car insurance coverage are available in two variants – liability only and comprehensive plans. Though comprehensive plans are better for any more inclusive coverage, they aren't very useful if you are using your car minimally. If your car's usage is restricted, you may make use a 3rd party liability only policy which would considerably cheaper and supply the mandated legal liability cover.
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Opting for any higher IDV
The Insured Declared Value of your car is its market value after factoring in depreciation. A high IDV is preferable since it ensures a greater claim settlement. However, in some instances, a higher IDV doesn't make much sense. It really makes car insurance expensive. For instance, for those who have an old car that you simply are thinking of replacing soon, choosing the highest available IDV is unwise. For such an old car, lower IDVs be more effective which would assist in saving the premium cost.
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Opting for unnecessary add-ons
Add-ons are essential coverage features which enhance the scope of coverage. However, they are available at an additional premium. If you should opt for add-ons, you should cut down on unnecessary ones. For example, if you are living in a flood-free area, an engine protect rider us useless. Similarly, if you don't take your car on long road trips, a roadside assistance add-on doesn't prove very relevant. So, reduce the frills. Go basic together with your car insurance policy and avoid unnecessary expenses.
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Not choosing discounts
A car insurance offers attractive discounts which help in lowering your premiums. Check whether you have availed all the possible discounts or not.
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Not using the accumulated No Claim Bonus
Your car insurance allows you a NCB discount if you do not make a claim in any policy year. This discount also increases every claim-free year. So, when renewing, you can examine if the applicable NCB discount is used to your renewal premium or otherwise.
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Not choosing voluntary excess
Voluntary excess is the portion of claim that you simply decide to pay yourself. While you choose to shoulder an element of the claim, the insurance coverage company's liability reduces. As a result, the insurer allows you a premium discount. So, if you're a careful driver and don't get involved with accidents frequently, you can choose a voluntary excess and produce a premium discount.
Find out why promptly renewal of car insurance policy is important
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Making small trivial claims
While your vehicle insurance plan allows you a premium discount for not making a claim, the discount is completely lost if one makes a claim any year. Therefore, it is usually advised to cover smaller claims from your pockets. For a small claim amount you should not lose out on the accumulated No Claim Bonus. If you're making trivial claims, you should think about stopping this practice.
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Having a poor driving record
If you are a reckless driver having a bad driving history, your premium could be higher. Since frequent claims are made around the company, the company, usually, boosts the renewal premium for policyholders having a bad driving history. You should be more careful when driving if you are to take down car insurance premium rate.
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Lapsing your policy
Car insurance plans are annually renewable plans. If you lapse your overall car insurance policy, any subsequent renewal would involve higher premium amounts. Because of the mandatory nature from the plans, you have to avail coverage for your car. Within this scenario, not renewing your vehicle insurance policy promptly is a mistake. You'd be charged a greater premium and can lose out on the accumulated no claim bonus if renewal is not done within 3 months.
Which mistakes are you making which are driving in the premium of your car insurance policy? Find out and rectify them to enjoy lower premiums.
