Purchasing car insurance can be a tricky business. While we all need car insurance to drive our car, finding the right cover and the right insurer can be difficult. Also, the many hidden clauses and conditions in insurance policies tend to make purchasing insurance more cumbersome.
In this blog, we help you with some facts that will help you make a more informed decision about purchasing a car insurance policy.
#1. You can reduce the premium of your car insurance
Did you know that you can substantially reduce the premiums of your car insurance by following some simple yet effective steps?
Firstly, you can reduce your car insurance costs by making your car safer and less vulnerable to thefts and accidents. For instance, installing safety features such as anti-theft alarm, gear lock, and steering locks can make the car less prone to accidents and thefts. As a result, you will be perceived as a low-risk customer for the insurer and, hence, your car insurance costs will reduce.
Secondly, raising the deductible on your insurance can help you lower your insurance costs. Let us first understand what deductible is. Deductible is the amount that an insured is expected to pay before the insurance company begins paying towards the claim made. The deductible amount is inversely proportional to your premiums: the higher the deductible, the lower the premiums and vice-versa.
Further, policy holders are rewarded with a no-claims bonus when they do not file claims in a particular year. This might, many times, be discounted from the premium for the subsequent year, resulting in reduced premiums. So, it is only logical that you do not file a claim for any and every repair to your car – you might want to pay yourself for the minor expenses and file a claim for the major ones.
You can make your standard car insurance more robust by supplementing it with add-on coverage. However, such add-ons come at an additional price and make the insurance more expensive. So, it is important that you select these add-on features with care and pick only those that you require.
#2. Bundling up your insurance might cost you less than taking individual policies
If you and your family members use multiple cars, all of which need to be insured, it might be cheaper for you to bundle up the insurance of all the vehicles rather than pay premiums for each of the cars individually.
So, if more than one car is used in your family, speak to your insurer to package the insurance for all the cars to save a substantial amount.
#3. Showing loyalty towards only one provider might be costly on your pocket
The insurance sector is a very competitive one and there are a host of insurers that provide great features at very affordable prices. So, holding on to only one insurer might not be prudent. Rather, before your policy expires, you must scout for insurance policies each year and pick the one that provides the best features at the best prices.
#4. Scouting for motor insurance policies online could be cheaper
Car insurance could be cheaper when you buy it online. This is because the insurers save on various costs, including overhead costs and those associated with middlemen and agents, and hence, they are happy to pass the benefit of the reduced expenses to their customers.
Did you know that many insurers provide discounts as high as 30 per cent to customers when they purchase policies online? Isn’t that a lucrative offer?
#5. You can transfer the no-claims bonus between insurers
A no-claims bonus is an incentive awarded to policyholders for not making any claim during the tenure of the policy. It is important to remember that this benefit is offered to a policy holder or the car owner and not to the vehicle. So, it remains with the policy holder even if he sells his car or buys a new one.
For the same reason, the no-claims bonus can also be transferred to another insurance company in the event that the insured decides to switch his insurance provider and purchase a motor insurance from a new provider.
#6. A comprehensive motor insurance need not be more expensive than a third party liability insurance
While it does seem as though a third-party liability insurance will be cheaper than a comprehensive one, you’d be surprised that this is not the case always. Because policyholders that buy cheaper insurance, often, tend to apply for more claims, the prices of a third-party insurance have increased.
#7. Paying for your motor insurance annually might turn out to be cheaper than paying monthly
If you can afford it, we would recommend that you pay for your insurance annually, all at once. This might turn out to be cheaper than paying each month. Because insurers tend to charge an interest on the premium amount on monthly payments, an annual payment might be a good choice.
We hope these facts have helped you understand the nuances of car insurance better.