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How to Save Big on Car Insurance

Team AckoFeb 27, 2024

As a law-abiding citizen of India, buying auto insurance is your responsibility. But, it does not have to burn a hole in your pocket. A little smartness will go a long way in helping you save on car insurance. This is exactly why we are here, to give tips on buying cheap auto insurance at the right time to save money.

Contents

1. On Renewal
2. While Selling a Vehicle
3. When buying Your First Vehicle
4. After Claims
5. When Usage Decreases
Ways to Save Money on Car Insurance in your 20s
How to Avail Best Car Insurance With Budgeted Premiums

It takes few minutes to save some money on car insurance cost considering below areas,

1. On Renewal

You will have a lot of options while renewing your motor insurance policy. On renewal, you will get a chance to make adjustments in the coverage. Correct your past mistakes this time.

Reconsider the insurance company: Are you happy with the service they provide?
Compare Policies: Did you compare policies from different insurers last time?
Adequate Coverage: Are the add-ons you bought last time, useful? Do you need more coverage?

Ask yourselves these questions and make necessary adjustments in the new policy. Also, if you had not filed a claim, you might get a No Claim Bonus (NCB).

2. While Selling a Vehicle

If you plan to sell your vehicle, consider selling it when insurance renewal is due. As you will not remain the owner for long, buying the most basic coverage makes sense. Having a Third-party (TP) Motor Insurance is mandatory by law in India. Cover your vehicle with a TP policy while selling it and transfer the insurance to the new buyer.

3. When buying Your First Vehicle

Just like renewing an auto insurance policy, buying a fresh one offers a chance for you to get a cheap policy with sufficient coverage. In this case, since your vehicle is brand new you will get more benefits as compared to an old one.

For example, the NCB is offered only for the first five years of buying a new vehicle. This is a long but continuous way of saving on motor car insurance. Buying Comprehensive Auto Insurance Policy is also a good idea at this point. It will slightly increase the premium amount, but will offer extensive coverage for your brand-new vehicle.

4. After Claims

In other countries, claiming has an adverse effect on an auto insurance policy. Fortunately, in India, this is not the case. Even if your vehicle is considered as ‘total loss’, you get to buy a brand-new policy for a new vehicle. The premium amount will depend on the make and model of the vehicle irrespective of your claiming history.

5. When Usage Decreases

Say you got a new job and the office is located in the vicinity of a railway/metro station. Commuting is way easier now and you don’t need to take your vehicle to your new workplace. Your auto insurance policy should reflect this reduced usage. Add-ons like Roadside Assistance or NCB Protection can now be removed, as the chances of you raising a claim becomes less due to less usage.

Also, if your car is just parked somewhere and you don’t use it very often, a simple comprehensive policy would suffice, to protect it from theft and vandalism. It will also be beneficial if you are living in an area prone to natural calamities.

Ways to Save Money on Car Insurance in your 20s

Read ahead to learn some tips on how to save money on car insurance in your 20s.

1. Better Safe Than Sorry

It is mandatory to purchase a car insurance if you want to drive your car in India. You might be tempted to get it just to comply with the mandatory aspect and not spend too much money. Yes, Third-party insurance is inexpensive but it doesn’t serve the purpose of insuring your car as it doesn’t cover the cost of repairing damages to your car.

On the other hand, a Comprehensive Car Insurance plan gives you all round protection. It is expensive than the basic policy but acts as a financial safety net in case your car gets damaged. You are in your 20s, adventurous and raring to go. Road trips, long drives, daily commute, etc. are an essential part of your life that increase the risk of getting into an accident. The cost of repairing your damaged car will be way more than what you will spend on purchasing a Comprehensive Car Insurance plan. Thus, it is better to be safe than sorry.

2. Adding Add-ons?

Add-ons are extra car insurance covers designed for additional financial security. People can go overboard while choosing add-ons resulting in unnecessary coverage and an increased insurance premium. These aren’t impulse purchases that you make while shopping. To think of it, you might not even need an add-on.

Be judicious while picking add-ons, choose only those that are suitable for your needs. For example, choose a Car Accessories Cover if you travel in your car with expensive gadgets and don’t opt for Passenger Cover if you often travel solo.

3. Jazzing It Up? Think Again

Thinking of jazzing up your car after watching the Fast & Furious franchise? Fast cars only look cool on screen or on racing tracks. Modifying your car can lead to an increase in your insurance premium. Repairing the damaged parts of a modified car can also turn out to be expensive. Over-the-top exteriors and gadget-filled interiors can also attract unwanted attention and make your car susceptible to theft.

4. Install Anti-theft Devices

Hold on, don’t let your imagination go wild, this is not like those Home Alone movies. Installing basic anti-theft devices in your car can reduce its insurance premium. Insurance companies might consider the fact that you have taken a proactive measure of ensuring that your car doesn’t get stolen. Thus, reducing its risk. Make sure to install anti-theft devices approved by Automobile Research Association of India and inform your insurance company about the same for a discount on insurance premium.

5. Safety First, Always

Your twenties is the time when you are exploring new routes and getting used to driving. This makes it all the more important to be cautious, follow rules and drive safely. Insurance companies reward safe driving in the form of a No Claim Bonus (NCB). NCB is a discount on your insurance premium. It is offered on policy renewal for every consecutive claim-free year. This discount can go up to a steep 50%.

6. Purchasing Car Insurance Online

Insuring your car directly from the insurance provider can help you save up to 80% on car insurance. Wondering how? When you purchase insurance directly from the insurance company, you cut out all the middle parties. New-age insurance companies are digital-first. This means that they do not spend much on physical infrastructure and other costs. They transfer such cost advantages to their customers. Hence, you can compare car insurance online and select the suitable one making the online purchase of car insurance quick, easy, and convenient.

How to Avail Best Car Insurance With Budgeted Premiums

Whether you are purchasing a car or car insurance, budgeting is an important aspect. People want all the features but do not want to pay an exorbitant price for it. This is where budgeting becomes crucial. Apt budgeting doesn’t mean cutting down on the features and benefits in order to reduce the price of the product. It involves creating the right balance between what is needed and the amount to be paid for it.

1. Car Insurance Prices

There are two types of car insurance policies in the Indian market, Third-party Liability and Comprehensive Car Insurance. Third-party Liability Insurance is mandatory by law thus, its prices are stated by Insurance Regulatory and Development Authority of India (IRDAI). However, the price of Comprehensive Car Insurance policy varies from insurer to insurer. This happens because generally the features and benefits offered by comprehensive policies of different insurers are different.

Insurers provide different features and Add-ons in their policies and charge as per their strategy. Thus, there is bound to be some difference in the price charged for Comprehensive Car Insurance policies.

2. Variables

Car insurance prices vary depending upon the information you share with the insurance company. The make and model of your car, the year in which you registered it, your claim history, etc. has an impact on the car insurance price. These are the things that you cannot change as you have to be honest while declaring information. However, there are certain variables that you can modify. Changing the following variables will have a direct impact on the car insurance premium.

Add-ons

As the name suggests, Add-ons are additional features that you can purchase along with your Comprehensive Car Insurance policy. These Add-ons are mostly designed to cater to the exceptions of a basic Comprehensive policy and lend a personalized touch. For example, passengers seated in the car are not covered in a basic Comprehensive Car Insurance policy. But if you go for a Passenger Cover Add-on, then they are covered.

Add-ons enhance your insurance cover and they also increase your premium. Thus, it is suggested to go for only those Add-ons that are absolutely necessary. For example, if you usually drive around alone then there is no need for going for the Passenger Cover Add-on.

Voluntary Deductible

Slight increase in the amount of Voluntary Deductible can reduce your car insurance premium. By opting to go for Voluntary Deductible you tell the insurance company that in case of an unfortunate event leading to monetary loss, you will contribute certain percentage to the claim amount and the insurer will not have to pay the entire claim amount to you. The flipside to it is that you will receive less amount of money when you claim insurance. Thus, if you are opting for voluntary deductible, do not keep it too high.

3. Proactive Measures

Installing anti-theft devices is seen as a proactive measure by insurance companies. Thus, they may provide a discount on insurance premium if a car has anti-theft devices that are approved by Automobile Research Association of India (ARAI). Becoming a member of Automobile Association of India can also fetch you a discount on car insurance premium.

4. Compare Car Insurance

You can compare car insurance prices easily by visiting insurer’s websites and using their car insurance calculator. You just have to enter some basic information and the car insurance calculator will let you know the approximate cost of insuring your car. Once you know the quotes, you can compare them along with the features offered by each insurer and then choose the policy that meets your budget. There are insurance comparison websites as well that compare policies and let you know the quotes.

The Bottom Line

Buying cheap motor insurance is not rocket science. By using simple online tools like comparisons and car insurance premium calculator while buying or renewing the policy, you can easily get the cheapest product available. These tools are at your disposal all the time. A cheap policy is not necessarily the worst if you choose the right coverage. Thus, the right time to buy cheap auto insurance is, Always.

Disclaimer: The content on this page is generic and shared only for informational and explanatory purposes. It is based on industry experience and several secondary sources on the internet; and is subject to changes. Please go through the applicable policy wordings for updated ACKO-centric content and before making any insurance-related decisions.

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