How to Reduce Car Insurance Premium During Renewal?

Let’s be honest: nobody likes paying vehicle insurance premiums. However, given that the Motor Vehicles Act mandates having at least a third-party insurance cover, opting for a policy is best to avoid legal hassles.

But there are specific ways you can reduce car insurance premiums at the time of renewal. Let’s dive deeper.

10 Tips to Reduce Car Insurance Premium on Renewal

Claim NCB Benefits

If you do not make any claim on your vehicle insurance policy for an entire year, you get a No Claim Bonus (NCB) reward. This can provide you with a maximum discount of 50% on vehicle insurance premiums at the time of renewal.

To ensure that you can claim the NCB in car insurance, avoid making claims for minor repairs or concerns. The amount saved on premiums can be much more than the costs incurred for fixing small issues.

Avoid Policy Lapse

One of the biggest mistakes that lead to higher premiums is failing to renew the insurance policy before expiration. You will lose the policy coverage and have to pay a higher premium when you buy a new insurance plan.

Renewing your vehicle insurance policy a few days before the actual expiry date can be a helpful measure in this regard.

Also read about: All You Need To Know About Renewing Your Long-Term Car Insurance

Lower IDV

Insured Declared Value (IDV) is the amount the insurance provider will cover in case the vehicle is wholly damaged or stolen. Moreover, your car’s IDV decreases by 10% with each renewal.

Thus, most people naturally desire a higher IDV. However, higher IDVs also result in higher premiums. So, lowering the IDV of your car to an acceptable amount can be an excellent way to cut down on premiums.

Choose Only Relevant Add-Ons 

The add-ons you have in your insurance policy contribute a great deal to the premium amount. Thus, while renewing your policy, it is essential that you choose only those add-ons that you need.

For example, select a legal liability to paid driver add-on only if you have a permanent driver for your vehicle.

Consider Getting a Pay-as-You-Drive Add-On

If you drive less than 10,000 km per year, getting a pay as you drive car insurance add-on cover can be an intelligent choice. This add-on can provide up to 85% discount on your comprehensive car insurance policy premium based on how much you drive in a year.

Remove the PA Cover if You Have It with Another Policy

Personal accident (PA) coverage is applicable for financial coverage if the owner-driver sustains injuries during an accident. It does not apply to the vehicle. Thus, if you already have a PA cover with an insurance policy for another car, you can remove it while renewing your vehicle insurance.

Otherwise, you will again pay for the same coverage and a higher premium amount.

Also read about: Key Points To Consider When Renewing A Car Insurance Policy

Consider Modifying Your Coverage

You can also modify your car insurance policy coverage based on your driving habits. For example, if you are not a frequent driver or plan to sell your vehicle soon, opting for a third-party cover can be an intelligent move.

It will effectively reduce your premium amount while taking care of expenses in case your car gets into an accident.

Opt for a Higher Deductible Amount

The deductible in your four-wheeler insurance policy is a fixed amount of money that you need to pay to get coverage. A higher deductible means that your insurer will have to pay less in case of a claim.

Thus, the higher the deductible, the lower the premium and vice versa. However, this also reduces your amount receivable in the event of a claim.

Install Anti-Theft Devices in Your Car

Installing anti-theft devices in your vehicle is an effective way to ensure that you do not need to make claims for robbery or theft. Moreover, certain insurance companies provide discounts on policy premiums to owners with such appliances installed in their vehicles.

There are several anti-theft devices that you can buy, like – keyless lock devices, anti-theft alarms, electronic immobilisers, etc. However, you need to ensure that they are Automobile Research Association of India (ARAI) approved.

Also read about: Things To Consider When You Buy Insurance For Your Second-Hand Car

Avoid Modifying Your Vehicle

Vehicle modifications like changing the rims, interiors, etc, can no doubt improve your car’s aesthetics. However, it will significantly increase premium prices as the cost to repair a modified part will always be higher.

Thus, to lower four-wheeler insurance premiums, it is advisable to avoid going for any vehicular modifications.

You now have a fair idea of all the steps you can take to reduce car insurance premiums. Another thing you can do is to renew car insurance online by comparing various policies across different insurers. Moreover, it will help you quickly renew insurance coverage if your policy expires soon, saving you from the higher premiums that usually come with buying a new one.