In life insurance, the company fixes the premium you have to pay for the duration of the policy. In car insurance, the premium is worked out by the company every year during renewal. And, you can actually do a few things to reduce your premium.
Take the voluntary deduction option
When you file for insurance claim, the insurance company deducts a certain sum of money (called deductible in your insurance form) from your claim amount. You could take the option of voluntary payment by you, in addition to the deduction made by the company. If you opt for this “voluntary deductible”, the insurance company gives you a discount of 20-35% on the premium.
So if you are confident of your driving skills, go for this option. Also read: 10 Points to remember while choosing car insurance
Claim insurance on significant damages only
The opportunity to earn No Claim Bonus is an incentive for you to maintain a claims-free record, since this can help you to secure a discount of between 20% and 50% on your premium from the second policy year onwards.
Also, steer clear of the temptation to make a claim for fixing every small dent on your car. If the amount you are going to spend on minor repairs is lower than the NCB you can accumulate, then it is better not to claim the amount–since having another claim-free year will further boost your NCB. And that will come in handy when you will purchase a new car.
Get a safe driving certificate
If you are a member of the Automobile Association of India (AAI) or its affiliates, then you come under the “safe driver” category–thereby improving your image and record in the eyes of your insurer, which will lower your premium by 5%, or Rs 200 (whichever is lower).
Installing anti-theft devices and safety features
If you have installed anti-theft devices and safety features–such as gear, steering-wheel locks, air-bags and sensors–approved by Automobile Research Association of India (ARAI) in your car, then you can expect your premium bill to be reduced by 2.5% (with an upper limit of Rs 500).
Making additional declarations
Voluntarily declare as much information as possible about your car while negotiating with a car insurer, as such details–ranging from fuel type, age of car, usage and claim history–can help you get a discount of around 10% on your insurance premium.
Also, disclose your personal information like age, gender, marital status, occupation and driving record, as many insurers now offer better rates to applicants willing to share these types of information. E.g. premium for women and those in higher age bracket will likely be lower as they are deemed to be safer drivers. Similarly, a young, smoking male will have to pay a higher premium for the same amount of cover than a young, non-smoking female. Also read: Third party premium on small cars almost doubles