Buying auto insurance in India can be confusing and expensive. Premiums creep higher each year, making it hard to find affordable coverage. Fortunately, there are things you can do to reduce your premiums and get the protection you need at a price you can afford.
This guide shares insider tips from the experts to help you save money on your car insurance policy in India. You’ll be well on your way to cheaper auto insurance with a few simple strategies.
Shop Around Every Year
The first rule for saving money on car insurance is to compare quotes from multiple insurers every year when your policy is up for renewal. Rates and discounts can change over time, so you’ll want to see what’s available. Going with the first decent quote you find could mean overpaying by thousands of rupees per year.
Increase Your Voluntary Deductible
One common money-saving tactic is to opt for a higher voluntary deductible. This refers to the out-of-pocket costs you’d pay in the event of a claim before the insurance kicks in. For example, increasing your voluntary deductible from Rs. 2,000 to Rs. 10,000 can reduce your comprehensive premiums substantially. Make sure you have savings on hand to cover the increased deductible amount.
Bundle Multiple Policies Under One Insurer
Most leading insurance companies offer multi-policy discounts if you bundle your car and two-wheeler insurance. The more policies you have with one insurer, the more significant your savings may be. Some insurers, like ACKO General Insurance, also offer discounts for bundling add-on covers like zero depreciation and engine protection with your car insurance policy.
Maintain a Clean Driving Record
Drivers with accident histories and traffic violations pay exponentially higher premiums. Maintaining a clean driving record with no tickets or claims is one of the most significant factors under your control when saving money. Drivers with spotless records can save thousands in premiums over the years.
Install Anti-Theft Devices
Adding layers of security can also help slash premium costs. Insurers offer premium discounts for policyholders installing approved anti-theft devices like GPS trackers, engine immobilisers, and car alarms. These devices make your car less appealing to thieves, reducing the insurer’s financial risks. You’ll need documentation proving approved device installation from authorised vendors to qualify for discounts.
Choose Less Coverage Than the Bank Requires
Banks and other lenders often require you to carry higher auto insurance limits than are legally mandated by your state. However, going above the state minimum contributes to higher premiums. Analyse the coverage limits suggested by your lender to see where you can reduce extras while still meeting legal minimums. Lower limits mean more personal financial responsibility in a significant accident.
Improve Your Credit Score
Insurers are increasingly using credit-based insurance scores to set premiums. Based on their broader credit management history, policyholders with poor scores are deemed to have higher financial risks.
Improving your credit score before your policy renewal could lower car insurance costs. Practical tactics include:
- Paying bills on time.
- Keeping credit balances low.
- Avoiding opening/closing cards.
Choose a Higher Model Year Car
Premiums also impact the insured car’s year, make, and model. Older cars need more modern safety equipment and are more prone to breakdowns and damage, so they cost more to insure. Upgrading to a newer car at renewal time may save money on premiums for the same coverage.
Drop Comprehensive & Collision Coverage on Old Cars
As vehicles age and depreciate, collision and comprehensive insurance become less cost-effective. The premiums may eventually exceed the car’s actual cash value. Consider dropping these optional covers for older cars worth less than Rs. 50,000. To stay legal, maintain liability, mandatory third-party coverage, and self-fund repairs as needed.
Choose Cars With Lower Insurance Rates
Specific vehicle segments, like hatchbacks and sedans, have significantly lower premiums than luxury cars and SUVs, which cost more to repair or replace. High-performance sports cars also tend to have sky-high premiums due to the increased risk they pose on the roads. When shopping for your next car, get insurance quotes to compare rates. Opting for lower-risk vehicle categories can keep your premiums affordable, even as newer models typically cost more to insure.
Conclusion
These expert tips can be super helpful for reducing car insurance costs in India. Even small changes can add up to big savings over time, so check your policy details thoroughly whenever renewal comes around.
