Skip to main content

Tips to save on motor insurance premium

You can explore pay as you go model and work on deductibles, too

Do you own a four-wheeler but find commuting via public transport on a daily basis more feasible than driving? Or are you someone who owns more than one vehicle but usually drives one of them more than the others? If yes, here are a few tips for you to save on your motor insurance premium.

Pay as you go: Usage-based or telematics car insurance is a relatively new concept in India but is gradually gaining popularity. Traditionally, motor insurance is determined by the make and model of the car, and not by the driving behaviour of the customer.

‘Pay as you drive’ model emphasises the driving behaviour and usage (distance covered) of the car. Premium calculation based on this can help bring down your premium cost compared to when computed conventionally.

Insurers will shortly be looking at introducing products where premiums are based on vehicle usage, post approval from the regulator.

Evaluate claims v/s No claim bonus: No claim bonus (NCB) is granted by the insurer for each claim-free year. The NCB discount starts from 20 per cent and goes up to a maximum of 50 per cent for five consecutive claim-free years. This makes for a considerable reduction in your premium. So, make sure you opt for NCB during claim-free years.

The other important point is that you should avoid raising a claim for a minor damage that will not cost you much because if you break your no-claim streak for small repairs, you will not be eligible for NCB in the following year.

For example, let’s assume you are eligible for an NCB discount of ₹5,000 next year and face a minor damage for which the cost of repair is ₹2,000. If you raise the claim for this, you will lose your right to claim the NCB of ₹5,000.

Opt for voluntary deductible: Almost all insurance policies have a compulsory deductible — that amount of the claim which the insured has to bear. Suppose the deductible in your policy is ₹1,000 and your assessed payable claim amount is ₹10,000, it means your insurer will pay you ₹9,000 and you have to pay ₹1,000. The compulsory deductible is fixed by the insurer and has no impact on the premium.

However, if you are willing to opt for a higher deductible and are ready to bear a higher amount during any loss, then this can help lower your premium.

Choose only third party cover for older vehicle: Your car insurance comprises two elements, third party (TP) cover and own damage cover which together make for a comprehensive cover. A TP cover is mandatory and covers you against third party liability, which may arise if a third party suffers a financial loss attributable to your vehicle.

However, TP does not protect your vehicle and a comprehensive cover is highly recommended. But, if your car is older than, say, 10 years, then you can consider taking a third party cover only.

Anti-theft device: Apart from enhancing the safety of your car, installing an anti-theft device (only that approved by the Automotive Research Association of India) also helps you get a discount on insurance premium.

Now that you are aware of these smart tips, explore them to save on your motor premium.

The writer is Head – Retail Underwriting, Bajaj Allianz General Insurance

Source: https://www.thehindubusinessline.com/pick-of-the-day/tips-to-save-on-motor-insurance-premium/article37024194.ece

Disclaimer: This article is issued in the general public interest and meant for general information purposes only. Readers are advised not to rely on the contents of the article as conclusive in nature and should research further or consult an expert in this regard.

Comments

Popular posts from this blog

Check 5 insurance schemes by LIC, SBI Life, PNB to secure your child’s future

  New Delhi: At least once in their lifetime, every parent must have thought about what will happen to their kids if something unfortunate happens to them. The thought indeed is a scary one. But that’s how miserable life can be. That’s why many parents invest in insurance schemes to secure the future of their child/children.  And what could be a better day to have a peek at insurance products ensuring that your children continue to receive financial cushion at a time when they need it the most. Some of the insurance products even provide impressive returns at the time of maturity that can be used to fund your kid’s education or marriage.  Here are a few insurance schemes for your child’s safe future: LIC New Children’s Money Back Plan Life Insurance Corporation of India’s (LIC) New Children’s Money Back plan is a money-back insurance scheme that is non-linked to equity markets. Returns from the insurance can be used to fund a child’s education or marriage or any other needs. The nomine

Four little-known motor insurance add-ons that are critical for vehicle owners

The increasing cases of road accidents , thefts, normal wear and tear, have pushed people to invest in motor insurance covers to safeguard their vehicles. A motor insurance policy provides protection against any loss or damage caused to the vehicle and its insured accessories as a result of natural or man-made calamities. In India, the Motor Vehicles Act of 1988 makes it mandatory to have a motor cover. Nonetheless, there are certain damage expenses that your regular motor insurance might not cover. For instance, suppose a specific part of your car needs to be changed, the final bill includes not only the cost of the spare part but also the additional labour charges for installing the item. Considering such situations, insurance companies came with a range of add-ons to give enhanced coverage for your vehicle, in addition to your base motor policy. While popular add-ons such as engine protection cover, zero depreciation, return to invoice are quite known to the people, there are other

11 reasons your motor insurance claim can be rejected

Recently, after a motorcycle accident in which the rider lost his life, the insurance company rejected the claim because it was a 346 cc bike. Apparently, as per the policy terms and conditions, the company was not liable to pay if the bike capacity was more than 150 cc. While this could be a case of misselling where the owner was not fully informed about the policy by the agent, there are various others reasons that claims can be denied. Typically car and two-wheeler owners do not read the poli .. Ignorance about policy & add-on covers: A common reason for claim rejection and people’s grouse is that some specific damages are not covered under the policy and one needs to buy separate add-on covers for these. “For instance, engine damage or depreciation losses are not covered in the basic policy and you need separate engine protector and zero depreciation add-on covers for these,” says Tarun Mathur, CBO, Policybazaar.com. Commercial use of vehicle: If you have bought a car for pers