Car insurance is an essential expense for every vehicle owner, but that doesn’t mean you have to pay a fortune for it. According to the Insurance Information Bureau of India (IIB), motor insurance penetration in India dipped to 3.7% despite a global average of 7%. However, many policyholders overpay simply because they aren’t aware of the ways to lower car insurance premiums.
If you’re looking to cut costs without compromising on coverage, a few smart strategies can make a significant difference. From adjusting deductibles to choosing the right policy, there are several ways to ensure you get the best deal on your car insurance.
How much does car insurance cost?
Car insurance premiums depend on multiple factors, including the type of vehicle, the coverage selected, driving history, and geographical location. In India, third-party car insurance is mandatory, while comprehensive insurance offers added protection against theft, natural disasters, and accidental damage.
On average, a third-party policy for a private car with a 1,500cc engine may cost around ₹3,000–₹4,000 per year, whereas a comprehensive policy with own-damage cover can range from ₹10,000–₹50,000 annually, depending on the insurer, add-ons, and vehicle type.
Your driving habits, claim history, and even your credit score can affect how much you pay. But with strategic planning, you can lower these costs significantly.
How can you save on car insurance?
There are a few ways to reduce your car insurance premiums while ensuring that you remain well protected. Let's discuss them:
1. Pay attention to the road
A clean driving record is one of the best ways to reduce car insurance premiums. Insurers reward safe drivers with lower premiums and No Claim Bonuses (NCB), which can reduce renewal costs by up to 50% if no claims are made for five consecutive years. Following traffic rules, avoiding rash driving, and steering clear of accidents help you get vehicle insurance cheaply.
2. Avail multi-car discounts
If you have multiple vehicles in your household, insuring them under the same policy can earn you a car insurance discount. Many insurers offer special pricing for multi-car policies, which is usually more economical than purchasing individual policies for each vehicle. This applies to both personal and commercial vehicles owned by the same person or family.
3. Check and compare rates before purchasing
Insurance premiums vary across providers, so shopping around is essential. Comparing quotes online from different insurers can help you find the best deal. Many aggregator websites allow you to evaluate policies based on coverage, premium costs, and additional benefits, ensuring you make an informed decision.
4. Downsize your vehicle
The cost of insuring a high-end SUV or luxury sedan is significantly higher than a smaller, fuel-efficient car. If reducing your premium is a priority, consider opting for a vehicle with a lower Insured Declared Value (IDV), which directly impacts the premium. A practical, budget-friendly car with safety features can lead to lower insurance costs.
5. Increase your deductibles
A deductible is the amount you agree to pay out of pocket before the insurance kicks in during a claim. Opting for a higher voluntary deductible can substantially lower car insurance premiums. However, ensure that the deductible amount remains affordable, as you’ll need to cover it in case of a claim.
6. Maintain a good credit score
In India, insurers increasingly consider credit scores when determining premiums. A higher credit score reflects financial responsibility and a lower risk of filing fraudulent claims. Paying EMIs and credit card bills on time, keeping debts low, and maintaining a healthy financial profile can help you secure better insurance rates.
7. Review your insurance coverage regularly
Many car owners continue paying for unnecessary add-ons or outdated coverage that doesn’t suit their needs. Reviewing your policy annually and removing redundant features like engine protection or zero depreciation cover (if not needed) can reduce car insurance premiums. If your car is older, you may even consider switching from a comprehensive policy to a third-party policy to reduce costs.
8. Talk to your insurance agent
Negotiation can go a long way when it comes to reducing car insurance premiums. Insurance agents often have access to discounts or can suggest minor modifications that can lower costs. Bundling your car insurance with other policies (such as home or health insurance) with the same provider can also earn you discounts.
Conclusion
Saving on car insurance is all about making smart choices. From maintaining a clean driving record to opting for higher deductibles, small changes can lead to significant savings. Generali Central offers customised car insurance policies tailored to your needs, ensuring optimal coverage at competitive premiums.
Before your next renewal, take time to compare policies, assess your requirements, and apply these cost-saving strategies. A well-planned car insurance policy ensures you stay financially protected without overspending.
FAQs
1. What factors affect car insurance premiums?
Car insurance premiums are influenced by multiple factors, including the vehicle’s make and model, the type of coverage selected, driving history, location, age of the car, and claim history. Safety features, anti-theft devices, and voluntary deductibles can also impact the cost.
2. How can I reduce my car insurance premium without compromising coverage?
You can lower car insurance premiums by comparing policies, maintaining a good driving record, opting for higher deductibles, bundling multiple policies, and choosing only necessary add-ons. Pay-as-you-go insurance is also a great alternative for those who drive less frequently.
3. Does installing anti-theft devices help in reducing premiums?
Yes. Installing ARAI-approved anti-theft devices like car alarms, GPS trackers, and steering locks can lower car insurance premiums as insurers consider these features to reduce the risk of vehicle theft. Many insurers offer discounts for vehicles equipped with security features.
4. Can I switch my car insurance provider for a better deal?
Yes, policyholders can switch their insurer at the time of renewal if they find a better deal. It's advisable to compare quotes online and check for No Claim Bonus (NCB) transferability before making the switch.
5. What is No Claim Bonus (NCB), and how does it impact premiums?
NCB is a discount offered on renewal premiums if no claims were made during the policy term. It starts at 20% for the first claim-free year and can go up to 50% after five consecutive years. NCB significantly lowers premium costs over time.
