Motor insurance is compulsory. The Motor Vehicles Act, 1988 mandates a valid third-party cover on your vehicle if you wish to drive it on Indian roads. You, therefore, cannot escape the policy if you own a car or a two-wheeler. What you can, however, do is reduce the premium of your motor insurance policy if you know how. There are various ways to lower your motor insurance premium if you are aware and careful when buying a policy. In 2019, if you would be buying or renewing your motor insurance plan, here are four tips which would help you save on the premium cost:
Compare, compare, compare
The importance of comparing motor insurance plans cannot be stressed enough (hence the usage thrice!). There are dozens of motor insurance policies available for your vehicle. When you compare, you can select the best policy which not only gives you the widest coverage benefits, but also comes at the lowest cost. The online marketplace has made comparing easy as insurance aggregators list all the available policies at once when you look out to buy or renew your vehicle insurance plan. Scroll down the displayed list to find insurers, their plans, coverage benefits and premium rates and then choose the policy which has the lowest premium with the maximum coverage.
Make safety your priority
You must have heard that you should drive safe to avoid possible accidents but do you know that making your vehicle safe also earn you premium discounts? Yes, motor insurance policies offer premium discounts if you install safety gadgets in your vehicle like ABS, anti-theft device, etc. You can earn a discount of 5 per cent to 10 per cent through these devices. So, make your vehicle safe not only for preventing accidents, but also for lowering motor insurance premium.
Motor insurance policies run for a continuous period of one year before they are renewed. In long term, though you pay premiums at once, coverage is considered on a per year basis. If, during the policy year, you do not make a claim, you stand to earn a no-claim bonus. This bonus starts at 20 per cent and goes as high as 50 per cent if there are five consecutive claim-free years. The bonus allows a discount in the premium when the policy is renewed. So, if you are renewing your motor insurance policy, use the existing no-claim bonus to claim a premium discount ranging from 20 per cent to 50 per cent. If the above-mentioned no-claim bonus excites you, you should try and preserve it. The discount provided by the bonus vanishes the moment you make a claim. So, try and avoid making claims which are of a smaller amount. You can meet such claims from your own pockets and save on the accumulated no-claim bonus. Then you can use the bonus to avail a hefty premium discount on motor insurance renewals.
Choose the coverage that you need
Motor insurance policies allow you to opt for add-ons by paying an additional premium. While add-ons are a good way to increase your coverage, you should be careful when choosing them. For instance, a zero- depreciation add-on is a must for new vehicles as it increases the claim payable. But if your vehicle is old, opting for the cover does not make much sense. Similarly, if you live in an area which is prone to flooding, opting for engine protect add-on is advisable. But if your area does not flood or get water-logged in monsoons, the add-on would entail unnecessary additional premium. So, be careful in choosing coverage for your motor insurance policy and pay for what you need. So, these are the fail-safe tips of reducing the premium of your motor insurance policy this 2019. You can use one or all of these tips for getting the lowest premium for your motor insurance policy and save your hard-earned money.
(The writer is CEO, RenewBuy.com)