COVID-19 has had a quick and significant impact on the insurance industry. People seem to be travelling less due to the increased need to work from home and the reduced need to commute to offices and other places.
As a result, many are questioning whether it makes sense to renew car insurance, and how they can save on premiums!
Tips on How to Save Money on Car Insurance During Lockdown
The following tips might be of some use to save money during this lockdown period -
Reduce the coverage
This could be in the form of removing a comprehensive car insurance cover to your car and just having third-party insurance or removing those frills and add-ons that one has opted in for. Use this to save on your premium paid as your car will barely be off use during these lockdown times. Just like what Shalini did when she opted out for a roadside assistance cover attached to her policy during the lockdown. Since now her office is shut and she is working from home hence she doesn't drive her car to the office anymore. Thus, she decided to opt-out of this cover as she feels that she doesn't require it anymore in lockdown. However, once the situation will become normal and she will go to the office, she will again buy this add-on cover. But for now, she saved a lot of money by excluding this add-on cover from her policy.
If you have two vehicles, take one off the road
This is a good stop-gap measure that can be taken for the period of lockdown and a little beyond that as the requirement for mobility in and around the city has drastically reduced. This can help one save on periodic premium payments.
However, it is important to note that the car which lacks the insurance cover cannot be driven on the roads at any cost as it is illegal to do so and one can be fined heavily for violating the Motor Vehicles Act, 1988.
Also, remember that such a move might result in the following consequences also – the insurer might categorize you as a higher risk individual for not renewing your policy and you will lose out on your No Claim Bonus.
Drive less, reduce the yearly kilometer count, save on premium
Since you are driving less in these COVID times, it is best that you let your insurer know about the same. This will help you to reduce your car insurance premium for the term of the lockdown period at least.
Include higher deductibles
A deductible is the part of the car insurance claim you must pay to get your vehicle repaired. Raising your voluntary deductible during such times can prove to be beneficial as the chances of incurring an accident or any risk of that kind is drastically reduced as the car is not put to use all that often.
Get rid of the comprehensive coverage for your old car
In case your car happens to be more than five years old, then it is advisable to opt out of the comprehensive insurance cover to save on the premium amount. This is especially considering the fact that such coverage is optional, to begin with.
Look for any special discounts
One such discount option that can be availed is the bundling discount. Bundled insurance implies that you are purchasing multiple insurance policies from the same insurance company. For example, you can purchase home insurance and a car insurance policy from the same insurance company getting a discount on one of the policy covers.
Compare online before buying a new policy
Go online and compare quotes offered by various car insurance providers on a neutral website. Acquaint yourself with the hidden charges and hikes mentioned in the policy document. Get in touch with persons who have already opted in for a motor policy from a specific company or get some advice from efforts. Invest enough time and effort into learning about your car insurance.
Save on car insurance premium during these testing times by following the suggestions posted above. Always weigh the pros and cons before taking any decision regarding your insurance cover. As the world is innovating to navigate through these tough times, so is the Insurance Regulatory and Development Authority of India.
However, with pay-as-you-drive insurance cover, a sandbox project, which has also ventured into motor insurance can also be a real boon to the customers. It is a comprehensive insurance cover that charges a premium based on the usage of the car which is detected by a telematics device. It makes a comprehensive insurance plan way more affordable than a regular car insurance plan and would be ideal car insurance in situations like lockdown.