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Tips to Save Money While Renewing Your Car Insurance

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

We all love savings, isn’t it? And in order to save more, we don’t hesitate to go that extra mile. Similarly, in the case of car insurance, you can save a lot of money at the time of policy renewal. Yes, your car insurance premium can become affordable hence less financial burden will be on your shoulders. If you follow a few tips and tricks, you can do a lot of savings on your car insurance at the time of policy renewal. 

Do read the article below to know about those cost-effective tips that reduce your financial strain during policy renewal.

Useful Tricks That Help You to Save More During Policy Renewal                

1. Compare and Renew Online: Comparison always works wonders when it comes to savings. At the time of policy renewal, it is advisable to compare various insurers online to grab the best deal. Online renewals offer affordable premiums as compared to offline renewals. In the online process, there is no commission payable to agents thus the savings will be passed on to the policyholders in the form of lower premiums. So, always prefer online renewals, and do not forget to compare various insurers to save big on your policy premium costs. 

2. Set IDV Correctly: IDV is known as the maximum amount that is paid to a policyholder by his insurance company in the case of total loss or theft of the vehicle. The calculation of IDV is based on the market value of your car, which also takes into account the depreciation factor. Different companies have their own ways of calculating the IDV hence it varies across the insurers. And, in case, your company sets the higher IDV of your vehicle, you have to pay a higher premium. Thus, it is important to select the correct IDV of a vehicle so that premium can be calculated accordingly. Hence a correct IDV will help you to avoid paying higher renewal premiums, which leads to huge savings.  

3. Use No Claim Bonus: Your good driving skills lead to claim-free years and which makes you eligible for NCB. Yes, no claim bonus is a discount that is given by insurance companies to policyholders on maintaining a claim-free record in car insurance. The NCB accumulates year on year at a certain percentage. And, a maximum of up to 50% total NCB collected on own damage for 5 consecutive claim-free years can be utilized to get discounts on premium. 

NCB discounts for consecutive claim-free years are as follows:

Number of Claim-Free YearsNCB Discount Offered
1 Year20%
2 Years25%
3 Years35%
4 Years45%
5 Years50%

Let’s understand this with the help of an example: Amit owns a Maruti Suzuki Baleno and pays a premium of INR 18,000 to insure his vehicle. From the last 3 years, he hasn’t raised a claim. Well, which means he is eligible to use NCB of up to 35% on his next premium. Thus, at the time of policy renewal for the 4th year, he can get a discount of INR 6,300 on his next policy premium. 

Note: The depreciation value of a car increases year-on-year and so does the actual premium cost varies (also increases on yearly basis). Thus, the actual saved value on the premium may vary. 

Another fascinating thing about NCB is that you can transfer the same in case you change your vehicle or car insurance company. Yes, your NCB is transferable in both scenarios hence you can enjoy lower premiums in the future. 

4. Opt for Higher Voluntary Deductible: When a policyholder voluntarily undertakes to pay a part of the claim from his own pocket, he indirectly chooses to reduce the burden of his insurance company. Yes, choosing a voluntary deductible means, you reduce the car insurance claim burden of your insurance company. So, the higher the voluntary deductible you choose to pay from your pocket, the less claim burden will be on your company, which means you can enjoy lower premiums. Insurance companies offer discounts on premiums to those who select a voluntary deductible. Thus, the higher the voluntary deductible share, the better for a policyholder as he can avail lucrative discounts on his policy premiums.  

5. Install Anti-theft Devices: Did you know that installation of anti-theft devices in your car can fetch you a saving of up to 2.50% on your policy premium? That’s Right! Anti-theft devices enhance the security of your car which means lesser chances of policyholders approaching an insurance company for claims. Thus, in return, insurance companies offer discounts of up to INR 500 to policyholders on premium renewals. 

6. Opt for Multi-year Policy: At the time of policy renewal, it is advisable to choose a multi-year policy as it helps you to save more money as compared to a single or 1-year policy. Yes, multi-year policies allow you to save up to 20%-40% on annual renewals, which is not the case with a single-year policy. Thus, the longer the duration of your policy, the better, as it not only saves you from the hassle of frequent renewals but the total cost of your policy premium also becomes affordable. 

7. Review & Access Add-on Covers: Though add-on covers are totally worth including in your base policy but reviewing them from time to time is also crucial. Review your requirements thoroughly and in case any add-on cover is no longer more useful to it, you can drop the same. Doing so will reduce your premium cost as add-ons come at an additional price along with your base policy. 

8. Avail Membership of Automobile Association: If you become a member of a reputed association like-Automobile Association of Upper India, Western India Automobile Association, Automobile Association of Eastern India, Automobile Association of Southern India,  you are eligible for a discount on your renewal premium. With this membership, you can avail of a discount of up to 5% or a maximum of INR 200 on your comprehensive premium renewal. 

9. Renew Policy on Time: Timely policy renewal goes a long way in saving more money. Carrying a lapsed/expired policy will not only make you pay hefty fines on roads but also come with late payment charges or penalties at the time of renewal. Thus, in order to avoid both, it is always wise to renew your policy before 45 days from its actual expiry date. However, renewing the policy on time also comes with another benefit. When a policyholder renews his policy before time, he is locking the best premium rates for himself for the entire year in advance. Thus, in case any price hike occurs later, his premiums rates will not increase, Hence, it's a win-win situation for a policyholder hence allows him to stay insured at an affordable premium.   

10. Avoid Small Claims: It would be wise to avoid making small claims in the policy. Pay for small expenses like scratches, dents and bumps from your own pocket as doing so will help in keeping your NCB intact. Whenever you raise a claim, the accumulated NCB becomes zero. Thus, you can not utilize them at the time of policy renewal to get discounts on your next premium. 


The above-mentioned tips and tricks can fetch you big savings on your car insurance premiums. Utilizing your NCB, Installation of Anti-theft devices, Opting for higher Voluntary Deductible and Selecting a multi-year policy are some of the crucial tips that minimize your financial burden. Hence allowing you to save more on your car insurance premiums at the time of policy renewal. So hope, you will keep these pointers in mind to enjoy lower premiums while renewing your car insurance policy.

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