Get discount package for your car insurance

For those who avoid buying insurance for their cars, here is some good news — get a reasonable discount package for your car insurance.

Experts say car premium can be lowered by at least 5 to 10%, if not more, and can be further lowered depending on the customer and criterion.

Policy holders can take advantage of differential premium charged by various players in this segment. For instance, place of residence, marital status, number of drivers, credit history of the policy holder or usage of vehicle are a few parameters based on which the premiums charged by insurance companies vary.

By offering differential pricing, customers who drive safe or don’t use their cars for longer distances form part of the lower risk category, where such customers are charged less premium.

“Customers who drive faster, or for longer distances on a regular basis are more risk prone and will be charged accordingly. Based on our analytics and research over the last ten years, we believe going forward, differential premiums will be based on other variables such as owner’s gender, age, and even marital status for that matter,” says Neelesh Garg, executive director - retail, ICICI Lombard General Insurance.

Opt for a comprehensive cover: Motor insurance is believed to be the major premium contributor to insurers in general insurance. Hence, pricing in motor insurance product is sensitive. While buying a cover for a private car, always opt for a comprehensive cover, which comprises own damage and third party (TP) cover.

The premium on TP can’t be changed because it is fixed by the Insurance Regulatory Development Authority (Irda), but the premium on own damage is variable and hence can be negotiated with the company to lower it depending if the customer satisfies certain conditions.

Sharing requisite information with insurers: Simply providing sufficient information in the proposal form, instead of leaving it blank, can help you lower your car premium. Details help insurers to differentiate the risk in a better way and offer competitive premium rates to their customers.

“Showing an insurer that the risk involved in providing you a cover is negligible can reduce the premium. For instance, by showing parking the vehicle in own compound rather than parking it outside can lower his premium further,” says Amarnath Ananthanarayanan, chief executive officer & managing director, Bharti AXA General Insurance.

Claim history of the policy holder: While renewing or buying a new policy, if a customer has a ‘No Claim Bonus’ (NCB) status, then in such a case that customer has an edge over others, because he has not claimed anything in the past which gives a good signal to the insurer and this may play a significant role in reducing his car premium further.

“One must ensure that his NCB status (if any) is carried forward while renewing the policy, because at times the general insurance company may forget to update the same where as some companies may do it deliberately,” says Vijay Kumar, head- motor insurance, Bajaj Allianz .

“A customer can lower the premium amounts by ensuring better maintenance, driving carefully, avoiding low-value claims for protecting the NCB and by installing anti theft devices and GPS locater in their vehicles,” said Garg.

Buying a new car: When buying a new car, you don’t need to worry about losing your NCB status, because the status can be transferred to the policy of the newly purchased car.

Even though petrol is dearer than diesel, the premiums charged by companies on petrol cars are comparatively lower than those on diesel cars. Hence, premium will be cheaper on a 1000 CC (cubic centimeter) car against a 1600 CC vehicle. Thus, lower the power of the engine, lower will be its premium. “Vehicles made in India and also which have low repair and maintenance costs will be charged comparatively lower premium than the imported vehicles,” said Garg.

Add on covers: There are assorted add-on covers such as zero depreciation, personal accident, and return to invoice cover, which are available with almost all motor insurers, but a person should buy only what he requires and not add on that the customer offers.

“One should ensure they are buying add-on covers that they really need and not buying it only because it is being sold to them by their agents,” said Vijay Kumar.