Car insurance actually means financial protection given by the insurance company. It is an agreement signed between two parties i.e the policyholder and the insurer. An insurance company covers all the losses that one might face due to damages to the car or in case of theft.  The insurance policies are broadly divided into comprehensive cover and third-party insurance. Comprehensive cover protects you from all the damages caused to your car, while third-party insurance covers for the damages caused to other persons or property by your vehicle. So, car insurance is very important.

To provide an extra layer of protection to his car, Mr. Kabir bought a motor insurance policy. Time passed and his insurance policy’s expiry day was about to come. At the time of the policy renewal, his insurer offered him renewing his policy at the same premium. But, he didn’t want to spend so much money. He wanted to save money while renewing his car insurance plan but he didn’t know how to do so. He discussed this situation with his office friends to seek their advice. They offered him the perfect solution. Mr. Kabir was so happy to know about the way to save money while renewing his car insurance plan. Read on to know what he did.

What is a Car insurance plan?

A car insurance policy is a yearly insurance plan which has to be renewed periodically. This article talks about how to save money when renewing your policy –

1. Go online and Compare the Various Motor Insurance Plans

The online insurance aggregators will give you the perfect platform for the renewal of your car insurance policy. All you need to do is to visit the website of your preferred insurance aggregator and check out the insurance plans available. Once you have gone through all the insurance plans, compare the plans suitable for you and then shortlist your preferred plans. Ideally, the best plan will offer you adequate required safety and protection at a competitive price. Mr. Kabir did this and so can you.

2. Calculate the correct insured declared value

Insured Declared Value (IDV) is known as the maximum sum of money assured by the insurance company for your motor insurance policy. Insured Declared Value is calculated by adjusting the market value of your vehicle by deducting depreciation. In a case when your vehicle is damaged beyond repair (i.e. the case of total loss) or it is stolen,  the sum of money that is paid to you is called Insured Declared Value. IDV is coordinated well with the premium. Higher Insured Declared Value means, your premium will also be higher.

Mr. Kabir was wise enough to compute the correct IDV. Then he found a suitable policy and selected that offered him the calculated IDV and he managed to save his money, as he didn’t have to pay a higher premium as earlier.

3. Use your Accumulated NCB

At the time of renewal, a policyholder enjoys a discount of a particular amount for being a good rider in the form of No Claim Bonus if he/she doesn’t file any claim for his/her car. The No Claim Bonus goes up to 50 percent every claim-free renewal. The NCB is a good option provided by the insurance company to their customers to enjoy a discount at the time of the insurance renewal.

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4. Opt for a Higher Limit of Voluntary Deductible

Every motor insurance plan offers its customers to select a voluntary deductible limit for the policy. This limit shows the claim amount that a policyholder has to bear from his own pocket. If he files a claim,  the limit of the voluntary deductible is paid by the policyholder and the insurer will pay for the remaining amount. The voluntary deductible offers you a discount on your premium policy. Mr. Kabir didn’t select a voluntary deductible limit in his current insurance policy but, at the time of renewal, as his friends’ advice, he opted for a deductible worth Rs. 1500 and got a discount on the premium.

5. Become a member of the Automobiles Association of India or Western India Automobile Association

Your insurer will offer you a discount on the premium if you have a membership in the Automobiles Association of India or Western India Automobile Association. Insurers also offer a premium discount if you have a membership of AAI or WIAA. As advised by his friends, Mr. Kabir became a member of AAI and got a discount on the premium and saved his hard-earned money.

6. Install an anti-theft device

Improving the safety of your vehicle always helps. When you improve the security of your vehicle by installing an anti-theft device, you can get discounted premiums, as your vehicle becomes less prone to theft.

7. Renew your insurance plan on time

When your insurance policy expires and you don’t renew it on time, you miss out on the No Claim Bonus opportunity as your policy lapses and become inactive if you don’t renew it within 90 days of its expiry. Mr. Kabir was well aware of this grabbing opportunity and he didn’t delay and renewed his insurance policy before the due date and got 35 percent of NCB. Buying motor insurance is not the last step, renewing your insurance policy is also very important. When you follow these tips, your renewal becomes economical and affordable. So, save your hard-earned money with the help of these tips and put that money to the best use.

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