Ten ways to reduce insurance premium

Ways to reduce premium

One way to save money on insurance premium is by shopping around for the least expensive cover. Our studies show that in India there is a wide gap between the most and the least expensive policies. Besides shopping around,there are other ways of reducing the cost of auto insurance. Here we list 10 of the most important ones:

• Car insurance premium increases depending on the number of luxury gadgets you add to your vehicle,like night vision,ultrasound sensors,and so on. Get these gadgets fitted only if you absolutely can’t do without them.

• Facilities like immediate assistance from the insurer in case your car breaks down also raises the premium level.

• The amount of voluntary excess you choose to pay also determines the cost of your policy. Voluntary excess is the amount that you have to pay in case of an accident. Higher the voluntary excess,lower will be the insurance premium.

• Insurance for loss of personal belongings,car locks,and so on raises the premium.

• A No-Claim Bonus (NCB) can fetch you a good amount of discount. These discounts increase as the number of no-claim years increase. Remember,however,that there is an upper limit to NCB.

• Nominating drivers or restricting the use of your car to drivers of a certain age will also help you reduce the premium.

• Adding safety and anti-theft features to your car like airbags,antilock brakes and immobilisers helps you get a better premium.

• Insurance companies may offer discounts to the insured who have purchased more than one policy from the same company.

• Don’t allow the policy to lapse. This might disqualify you from availing the discounts you would otherwise be entitled to.

• If you have a garage,park your car inside it. This will entitle you to a discount.

Your job is not over yet. You might have managed to get an attractive premium this year,but what about next year? If you observe the following injunctions,you will be able to keep next year’s premium also low:

• First and foremost,drive safely.

• If you decide to change your vehicle,consider a more traditional car. It will save you a fortune in fuel and insurance premium cost.

• Finally,don’t add a young or inexperienced driver to your insurance policy as this could cause your premium to soar sky high.

At a web site like policybazaar.com,compare the insurance policies offered by the top insurers. This will help you find the most cost-effective policy and prevent you from paying out more than you need to.

The author is chief executive officer,policybazaar.com