When we purchase a new car, we do not think about the possibility of accidents or any such damages to the vehicle. We even tend to postpone the most crucial duty of purchasing a motor insurance till it’s too late. This is because a majority of people consider motor insurance as an additional cost. It is detrimental that we invest in it to safeguard ourselves against vehicular damage or natural calamities.
The two types of car insurance plans are comprehensive and third-party liability. Comprehensive insurance covers any damage caused to your vehicle. It also covers the damages caused on account of an accident by your vehicle to the other party. Only the latter type of coverage is mandatory. It is advisable to invest in comprehensive insurance to cover all grounds.
A third party car insurance policy will protect you from legal liabilities that might arise in case of an accident. For example, you hit someone’s car and cause severe damages. Then, whoever your insurer is, will bear the expenses or liabilities that arise from such an eventuality.
Go through the top five tips mentioned below to help save money on car insurance:
- Compare car insurance policies
When you purchase a new car, it becomes mandatory to buy insurance. The salesperson will who assist you in buying the car will assure you to get your car insurance at the cheapest possible rates. One possibility is that you could end up buying a wrong policy, which might not provide the coverage required. Therefore, it is recommended that you compare policies online. Search the best fit for your requirements and make sure to avoid buying policies that are cheap without understanding their coverage.
- Car insurance cost
Car Insurance will vary from car to car and person to person. For example – An expensive car of Rs. 2.5 Lacs with a depreciation car insurance will cost you different as opposed to a car that costs 10 lakhs. If non-depreciation is opted (the value of your car not affected by the depreciation) the vehicle insurance premium slightly increases.
There are other factors such as the age of your car, your driving record, your association with any vehicle organization, etc. that affect the cost. Owning a car in India means it is mandatory to have a car insurance policy (third party). On the other hand, comprehensive insurance is your choice. It is essential as it covers your vehicle against a variety of hazards.
- Transfer Your Insurance
Do not do away with the existing car insurance if you are removing your old car and buying a new one. The no-claim bonus is carried forward along with the benefits that you might have accrued over the years. That way, the insurance cost for your new car will reduce.
- Think hard before claiming
Usually, you make a claim if your car is damaged and needs money for repair. This is the standard procedure. Do not claim for small repairs.
- Premium calculator
A car insurance calculator is an online tool, which helps you figure out the quotes of different insurance companies in India.
The formula mentioned below is used to calculate the car insurance premium.
Damage premium: (Depreciation + NCB) + Liability premium
Given below are the certain factors on which the premium for your car insurance depends:
The IDV of a new car will always be the most; however, it will gradually lower down due to depreciation.
- Cubic capacity
The total fuel and air displaced through the cylinders of an engine refers to the cubic capacity of a vehicle. It has a great influence on the auto insurance premium for the third-party cover.
- Geographical location
The area you reside in will reflect your lifestyle as you share a direct relationship with the location. Metropolitan areas are a part of Zone A, which would have a higher premium as opposed to the remaining cities of Zone B. Cities of Zone A have more traffic and a relatively higher chance of getting your vehicle stolen.
- No claim bonus (NCB)
No claim bonus (NCB) is a reward given to owner of the vehicle for not making any claims in the policy term.