8 Ways To Lower Premium Rates When Buying An Auto Insurance Policy


Auto insurance can be expensive, but there are ways for consumers to lower premium rates. While it is advisable to compare car insurance quotes online using a trustworthy insurance web aggregator – to get the best options available at affordable prices – there are other ways as well. that can help a consumer save money.

Here are some tips for lowering premium rates while opting for an auto insurance policy:

Look for benefits

There are different discounts that an insurer offers to policyholders. These discounts are based on the insured’s occupation, driving record, age and certain other factors.

“Therefore, users should check with the insurer for the various discounts they are entitled to,” suggests Rakesh Goyal, director of Probus Insurance, Insurtech Broking Company.

Check location

According to Goyal, location also has an impact on policy premium rates. If a person is in an accident-prone area, there is a good chance that they will have to pay comparatively higher premiums. In this case, one can look for various options by comparing quotes online.

Voluntary deductibles

One can reduce auto insurance premium rates by increasing deductibles. If the deductibles are very low, then the policy premium rates would be higher.

“A high voluntary deductible is however recommended for someone who has not made any claims in the last few years or someone who has excellent driving skills (the risk of an accident would be lower in such a case) “, explains Goyal.

Set up a safety device

The installation of anti-theft devices is suggested because these devices not only ensure the safety of the vehicle, but also help to reduce the cost of the annual premium. Being a member of the Automative Research Association of India (ARAI) allows the consumer to benefit from additional discounts on premiums.

Avoid excessive modifications

According to Goyal, it is recommended to avoid making any modifications to the car that could result in higher premium rates. The addition of spoilers, ultrasonic sensors, gadgets, etc. should be avoided to keep premiums on the lower end.

“Remember to inform the insurer if any changes are made. If not informed in time, the user could have unpleasant surprises when making the claim, or in some cases, the insurer could even invalidate the policy, ”advises Goyal.

No claim bonus from old to new

Consumers can transfer their accumulated NCB to the new car purchased because auto insurance is tied to the insured and specific to the car. Even after selling the old vehicle, the insurer can be asked to provide a disclaimer.

Users can then transfer the existing policy to the new car and carry over the bonus. This will help reduce the premium amount of the new policy for the new car.

Choose the correct declared insured value (IDV)

The IDV is the amount for which the car is insured and forms the basis for all settlements in the event of theft or irreparable damage in an accident.

According to Naval Goel, CEO and founder of PolicyX, a lower IDV requires a lower premium. However, it should be calculated judiciously, as the IDV is the maximum value with which the insurer can compensate.

Choose add-ons wisely

“You have to select add-ons based on the needs and condition of the car,” says Adarsh ​​Agarwal, appointed actuary at Digit Insurance.

“For example, if someone has a car that is over 3 years old, maybe zero depreciation is not too necessary, but for a new car it is a must. Therefore, with such decisions , you can opt for full insurance coverage without too much of a pocket pinch, ”he suggests.

Disclaimer: CNBCTV18.com advises users to consult with certified experts before making any investment decisions.

First publication: STI

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