Purchase of car insurance can get you through a lot of riddles. Also once you get the best possible motor insurance, it’s important to know various factors which help to reduce your auto insurance costs. In fact the period of post car insurance purchase is the period which actually lets you benefit from a range of options. However, ignorance about such factors will devoid you of your car insurance benefits.
Therefore, I am presenting all the motor insurance holders some tips to reduce your car insurance benefits. Also further I have listed the factors which play a significant role in determining your car insurance premium.
Some easy tips to reduce your car insurance costs are as follows-
Sustain small voluntary deductibles from your pocket
Paying for small damages to your car voluntarily from your pocket gets you the benefit of low premium over a period of time. Your car insurance premium can be reduced to maximum 30%!
Get bonus for no claim!
Your auto insurance provider grants you nearly 50% reduction on your Motor insurance when you do not claim your insurance. Insurance companies grant these benefits as a reward for a person’s good driving record. Also there are certain insurance companies in India like Bajaj Allianz which transfer maximum 50% of your current No Claim Bonus from any insurance provider. Also if you decide to sell your car, your no-claim bonus will be transferred to the new insurance policy for new vehicle. In this way, you get the benefit of much lower premium costs!
Get further discount!
Cars installed with certain enhanced security systems can be insured at lower premium rates. It’s because of the car’s lower chances of being stolen. However, only the cars which are approved by ARAI or Automotive Research Association of India are liable to attract a premium discount of 2.5%.
Further, let’s have a look at the factors which affect your Motor insurance’s premium. These factors are based on the insurance provider’s undertaken risk factors which are grouped as per below 4 categories-
Vehicle related risk factors:
• Vehicle related risk factors include elements like fuel type and cubic capacity of your car. These factors determine your auto insurance premium cost. Vehicle types like SUV and commercial vehicles demand higher premium payouts. It’s because insurance firms receive huge count of claims on such vehicle types.
• Diesel vehicles usually demand 10%-15% higher premium rates than the petrol cars. During renewal of your auto insurance policy, your car’s age and its depreciation value will predominantly decide the insurance premium.
• The premium for vehicles which are less than 5 years old is decided as per the depreciation value of the car over the years. It’s known as the IDV (insurance declared value).
• The premium for vehicles which are more than 5 years old is decided as per the car’s current market value.
Location related risk factors:
• Location related risk factors relate to areas of registration. Usually, urban residents are charged with higher premiums than the rural ones. The area which shows high level of theft demands greater premiums from people.
• If there are multiple drivers for your car then rates of premium goes up. Also the driver’s age and profession impacts the value of premium.
• Further you can browse through some beneficial add-ons which you can consider to enhance your motor insurance coverage benefits.
Hence, knowing the above tips and factors which affect your car insurance premiums will help you to reduce your car insurance costs significantly.