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9 Secrets That Your Car Insurance Companies Won’t Tell You

By Vikas Chandra Das
21 July 2022, 11:46 AM

Well, we all know how car insurance premiums can get costly, especially when you have certain add-ons in the policy or when the insured vehicle is a high-end one. If not managed properly, it can take a financial toll on you. So, this is where you need to make smart moves to lower the premiums and enjoy other additional benefits. 

9 Secrets to Choose the Right Car Insurance Policy and Save Money on Premiums -

1. The Model and Make of Your Vehicle Affects Your Premium

Insuring a high-end car is much more expensive than a budget-friendly car. It is so because of the fact that the repair work of a Mercedes or BMW will be costlier than that of a Maruti Suzuki hatchback. Therefore, the model of your car plays a crucial role in determining the prices of the premiums you pay. 

Similarly, the manufacturing date of the car matters too. This gives the company an idea about how old the spare parts are and the likelihood of them reaching a stage that requires replacement. It also helps them take account of the current market value and the depreciation the car has suffered over the years. 

2. More Gadgets Equals More Premium

If there are any modifications done to your car, either for aesthetic or technical purposes, the car insurance company will not bear the losses if they are damaged. For example, if you install a lavish touch screen entertainment system instead of the company-fitted stereo system, the insurer will not pay you any money if it is damaged. If you want to get compensation for that as well, then you will have to pay higher premiums. 

3. Installing Safety Devices Lowers Your Premium

This is one of the easiest ways to lower your premium. You just need to install safety devices in your vehicle or your parking spot to limit the possibility of damages happening to the car. Proximity sensors and alarms in the car or a CCTV camera in your garage are just a few of the gadgets that you can install to reduce the price of the premiums. 

4. Bad Drivers Get Higher Premiums

If your track record as a driver has been excellent, then you will get a discount on premiums. As per average market rates, a driver with a bad track record ends up paying 40% more on premiums, which is a huge difference, to say the least! On the other hand, if you are a responsible driver who does not make a single claim throughout the year, you will get a gift in the shape of a No Claim Bonus (NCB). NCB lowers the price of the premiums for the next year.

5. A Road Safety Organisational Membership Will Lower Your Premium

If you are part of a Road Safety Organisation, you will get a discount on premium, albeit a small one. You just need to submit the name of the organisation, membership number, and the expiry date of the membership to claim this discount. 

6. When You Skip Filing Claims for Minor Repairs, You Are Entitled to a No-claims Bonus

As mentioned above, No Claim Bonus is a huge factor in terms of reducing the cost of the premiums. You can save thousands of rupees every year for the first 5 years of the term if you do not make any claim. Now, practically speaking, it is very hard to drive a vehicle without meeting even a single minor accident, especially if you are in a metropolitan, crowded city. 

So, what you need to practice is that you should not make a claim for minor damages. A small dent or a scratch that ruined your paint job of the car are some areas where you should not make the claim. You may pay out of your own pocket for this, so that you end up having a zero-claim year, at the end of which you can enjoy the benefits of No Claim Bonus

7. Your Voluntary Deductions can impact pay-outs and premiums

A voluntary deduction is the amount of money you are ready to pay out of your own pocket when a claim is to be settled. If you have zero voluntary deductions, then the company will pay almost the whole amount (excluding compulsory deductibles). However, the catch is that the premiums of such a policy will be high. 

Voluntary deductions and premium prices have an inverse relation, which means, the more you are ready to pay out of your own pocket, the lower will be the premium prices. So, if you are a good driver, then you should opt for such a policy and be ready to have more voluntary deductions. 

8. Your RTO location (vehicle registration) affects your premium

If your RTO location lies in the cities like New Delhi, Pune, Kolkata, Bengaluru, Chennai, Ahmedabad, Hyderabad, or Mumbai, then the premium rates are higher than the rest of the country. It is because of the high number of vehicles in such cities that leads to the increasing possibility of an accident happening. Yes, you cannot shift to a city just to reduce the price of the premiums, but if you are to move to a new city, this is something that you may consider while planning out the budget. 

9. Compulsory Deductibles can affect the premium

Compulsory deductibles are the ones that you must pay and it depends on the size of the engine. It has been mentioned in this table. Make sure that these charges are not hidden and clear to you before signing the deal.

Engine ccCompulsory Amount
Up-to 1500ccINR 1000
Above 1500ccINR 2000


While buying a car insurance policy, keep these points in your mind so that you make the right decision. Doing this will definitely help you reduce the price of your premiums. Also, you should buy the policy online so that you can easily compare all the parameters of the policies and save money on that front as well by eliminating the commission costs and other hidden charges.

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