Auto insurance especially third party liability, is a must if you are driving your car in India. You just cannot escape paying your premiums. But you can do something… You can save on the premiums of your auto insurance plan.Gone are the days when geographical zone, engine capacity, price and age of the vehicle would determine, how much of an auto insurance premium you paid.Nowadays determining the premium you pay for the car insurance plan, has gone to a whole new level.All you have to do is fill in the proper details to your Insurer and you can avail car insurance at a lower rate.
If you drive an SUV, the maintenance costs may be higher than a car. A diesel car is perceived to have higher maintenance costs, than a petrol driven car. The premiums you pay for the car insurance plan if you own an SUV or a diesel car, are higher than a petrol driven car.
Insurers have an idea of the past performance of the cars. Which make/model breaks down frequently? If you drive a car which the Insurer views as highly accident prone, or could breakdown easily, you would have to pay a high premium for your car insurance plan.
Your gender could also determine the premiums you pay on the car insurance plan. Many Insurers view women as safe drivers of cars. They are charged a lesser premium on their car insurance plan, than their men counterparts. However some Insurer’s, do view men as better drivers of cars and they get a discount on their car insurance premiums.
Your occupation also plays an important role in deciding the premiums you pay for the car insurance plan.A student is considered a rash driver and has to pay a higher premium for the car insurance plan. A journalist or a salesman, is believed to use the car frequently and would incur higher maintenance costs. This means he/she would have to pay a higher premium on the car insurance plan.Doctors, lawyers, police officers and teachers are considered to be law abiding citizens and also use their cars less frequently. This means a lower maintenance bill. They pay a lesser premium on the car insurance plan.
The premiums you pay for the car insurance plan, depends on the city you register the car. If your car is registered in a Zone A city, you have to pay a higher premium. Mumbai, Delhi, Chennai, Kolkata, Pune, Ahmedabad and Bangalore are Zone A cities. The rest of India is Zone B.
Safety features in your car such as an airbag and installing anti theft devices, could reduce your car insurance premiums by 2-3%. Use anti theft devices of approved make. Park your car in a closed door garage. You could save on car insurance premiums.
You are eligible for a no claim bonus, if you have not made a claim on your car insurance policy in the previous year. You get a discount on the car insurance premium, when you renew the car insurance plan. You get a no claim bonus only if you avail a comprehensive car insurance plan.
You can claim a discount on premiums under no claim bonus, only on the own damages part of the premium and not the third party liability. Own damages part is about 80% of the car insurance premium. Third party liability makes up only 20% of the auto insurance premiums. If you make a claim on your car insurance plan, the no claim bonus is back to zero.
The discount you get under the no claim bonus on your premiums, can be around 20% for the second year and rises to over 50% by the 5th year. The no claim bonus depends on you (insured) and not the car. If you have a no claim bonus of 50% and you buy a new car, you can transfer your no claim bonus to the new car. You have to sell your old car and buy a new car and then transfer the no claim bonus. You can transfer your no claim bonus, only to a new four wheeler and not a two wheeler.
You can save on the premiums of your policy if you buy/renew your car insurance plan online. You do not require the services of an insurance agent if you buy the car insurance plan online. The Insurer saves on the cost of intermediaries/ insurance agents. This makes online car insurance cheap.
So keep these points handy and save on your car insurance premiums.
The research team at IndianMoney.com comprises of certified and experienced professionals who share the company's vision to make every Indian financially literate by equipping every Indian with right and unbiased advice. IndianMoney.com research team provides newsletters, articles, videos and FAQs on various financial products and concepts only to help you make wise financial decisions.
Subscribe to our Youtube Channel
Hello friend! I am your personal financial advisor. By the end of this interactive session, I will help you to plan yours and your family's finances to ensure a better future.