Top 10 Tips for Saving Money on Car Insurance Premiums

Owning a car these days has become a necessity more than a luxury. The dependency can either be for commuting or running errands. To make sure that your vehicle is in good shape, you take it to the servicing centre and for unforeseen circumstances like accidents, theft etc. you must buy car insurance to ensure that you are financially covered during mishaps.

Table of Content

• Shop Around for the Best Rates
• Bundle Your Policies
• Review Claim History
• Explore Options for Discount Offers
• Location
• Maintain Your Credit Score
• Ensure Paying Premium in Full
• Economic Factors
• Utilize No Claim Bonus (NCB)
• Avoid Gaps in Insurance Coverage

Our daily basic needs like food, clothes and shelter come with a price tag. So we must be aware of the amount we are paying, to get our necessities without spending more than what is required. These petty expenses when not recorded or monitored properly will significantly turn out to be a huge amount and nobody is willing to overpay for these necessities.

To sustain yourself, you have to take care of your basic needs every day and throughout your life. So even if you can save a bit, you are saving a lot. The same holds even when you buy car insurance as it will be valid for a fixed period and needs to be renewed regularly. Understanding the factors that contribute to the hikes in car insurance can help you manage and save money while buying insurance premiums.

Shop Around for the Best Rates

While purchasing our daily needs we shop around to compare and bargain as we can save a lump sum during the payment. You can apply the same strategy even while buying car insurance online to safeguard your car financially. Insurance rates for cars can vary significantly depending on the company you choose. You won't know how much you can potentially save if you don't shop around.

Bundle Your Policies

In India, TV commercials often promote the ability to buy insurance in bundles like home insurance, car insurance, health insurance etc. An insurance company may offer discounts to policyholders who carry more than one type of insurance. Generally, a bundling discount can reap savings of 5% to 25%.

Review Claim History

Making frequent claims, especially for minor damages can result in higher premiums. Insurance companies may adjust premiums accordingly if they see there are frequent claims, as it is a sign of increased risk for the insurance company. The best advice to save money is to avoid filing claims for petty repairs.

Explore Options for Discount Offers

Apart from bundling discounts, insurance companies offer a bag full of other discounts too. For example:

1. Early Bird Discount This type of discount is meant for those who have made fresh purchases and car insurance renewal premiums.
2. Anti-Theft Discount Installing an approved anti-theft device on your car reduces the chances of theft which reduces the liability of the insurer. Hence, it is another way to save money while buying car insurance premiums online.

Location

Living in an area where natural disasters take place frequently and with high crime rates can increase your car insurance premium. As these factors give rise to the risk of theft, accidents and damage. Since relocating does not make sense you can lower the risk by installing anti-theft devices or by parking your car in a secured place.

Maintain Your Credit Score

Most of the insurers do consider credit-based insurance scores during the insurance premium calculation. Insurance companies assume that the lower your credit-based score is, the higher the odds are of filing a claim. This tip serves in your favour because a good credit score will also help you with financial instruments, like loans of all types.

Ensure Paying Premium in Full

While buying car insurance online, keep in mind rather than spreading out payments with equated monthly installments, consider paying your premium in one lump sum. Most of the insurance companies will give you a small discount for doing so.

Economic Factors

Inflation and rising costs of labour or vehicle parts can directly affect car insurance premiums. When the cost of these services increases, insurance companies adjust premiums accordingly to cover the higher expenses. You need to stay informed about market trends and regularly compare what different providers are offering.

Utilize No Claim Bonus (NCB)

During your policy period if you do not make any claims then you are entitled to a NCB. Using this bonus can significantly reduce your premium, so make sure that you use your NCB when renewing your policy.

Avoid Gaps in Insurance Coverage

When you allow your car insurance policy to lapse even for a brief period, it can lead to higher premiums while renewing or purchasing a new policy. Your insurer may view this gap in coverage as a sign of financial instability or negligence. Maintain continuous coverage and set reminders to avoid delays for policy renewal dates.

Car insurance plans cover the vehicle of the insured against losses and damages caused due to an accident, due to natural or man-made calamities. Car insurance premiums can rise for numerous reasons however, understanding the factors that contribute to these rises in prices allows you to take steps to manage and reduce your costs.