A car insurance policy can be a source of solace and financial security when misfortune strikes, which is why it is extremely important that these policies are valid all year round. Not having recourse to making claims under the policy due to the non-renewal can spell serious trouble.
Top Ways in Which You Can Reduce the Car Insurance Renewal Cost
One of the most common reasons why policyholders tend to drag their feet while renewing their car insurance is due to the rising premium prices. This hesitation, coupled with the question about how the premium prices fail to decrease with depreciating car values, makes the policyholder seriously re-evaluate the reason as to why he or she must opt-in for the renewal.
Read on to find out methods by which your car insurance premium might be reduced while renewing your policy. You should follow these methods instead of avoiding the renewal of the policy altogether!
- Renew it within the due date – and before the policy lapses as one can be charged for non-payment of the premium amounts and it might reflect poorly on one’s credit history too. Additionally, the person seeking to get the policy renewed after the lapse of his or her policy must get the vehicle inspected afresh. Also, he or she has to pay high premiums as well. And, this is what happened with Shalini, when last year she forgot to renew her expired car insurance policy on time hence her policy lapsed. Thus, she purchased a new car insurance policy, and that too with inspection of her car again and also paid high premium. This could be avoided if she had renewed her car policy on time hence she wasn't had to face this hassle.
- Choose multi-year third-party- if you happen to have only a third-party insurance cover, it is advisable to opt for multi-year third-party insurance cover as it protects you from the annual hikes in premium as given by the Insurance Regulatory and Development Authority of India(IRDAI).
- Try not to make any small claims – for small dents and scratches as you will lose out on the No Claim Benefit and it will adversely impact your premium too during the time of renewal. Monetarily it makes sense to cover for small expenses rather than losing out on a good sum that one might receive as an NCB at the end of the term period.
- Use the No Claim Benefit to good effect – as these benefits ensure that you get rewarded for having been a cautious driver that has not made any claims during the entire term period. Make sure that you claim it while renewing the policy as it is a good sum of money to be getting from the car insurance company.
- Compare, compare, and compare - look at different policies offered by different insurance companies on neutral websites and peruse their terms and conditions with care. One may even access reviews, the popularity of the policy, premiums, claim settlement ratio of the insurance company, etc. to get more clarity about each individual insurance product. Also, online distribution channels are cheaper than the conventional method.
- Mention the correct IDV or Insured Declared Value – as it will help in assessing and optimizing one’s premium. Mentioning the right IDV and other related information is vital in lowering the premium amount.
- Opt-in for voluntary deductibles – are those amounts that the insured offers to pay out of his or her own pocket without requesting the insurer to cover the same. Each policy has a predetermined voluntary deductible limit and increasing the same might help in the reduction of the premium amounts. However, choose this limit wisely to ensure that you do not render the very purchase of the insurance policy infructuous. A higher voluntary deductible limit must generally be opted in circumstances where you are an extremely safe driver and if you have not made claims for a few consecutive years.
- Look for other discounts – that insurance companies offer for various policies and benefit from the same. The amount of discount offered will depend on the policyholder’s age, profession, city of residence, driving record, etc. These discounts might result in a significant reduction in the premium amounts or might allow for additional add-ons at lower prices, etc. For example, having a motor association membership in accredited associations such as the Automobile Association of Southern India or Automobile Association of Upper India might result in a discount of up to 5% on the policy cover.
- Complete the process online – as it reduces the significant amount of time and effort that the insured must put in. Doing so allows for multiple benefits such as last-minute payments and easy, hassle-free transactions. One may even use the help and guidance offered by the insurance company while renewing the policy online in case of doubt.
The price of insurance products is unlikely to decrease in the near future. Therefore, it is in the best interest of the insured to ensure that the premium paid is the lowest amount.
To do so efficiently, invest considerable time to research different policies as this will definitely benefit you by ensuring that you save yourself from paying high premiums at the time of the renewal of the policy.