Know Your Insurance – Your Ultimate Guide to Car Insurance Premium

Know Your Insurance – Your Ultimate Guide to Car Insurance Premium

Printed on March 12, 2021. EST READ TIME: three MIN

Know Your Insurance - Your Ultimate Guide to Car Insurance Premium

In a world the place cash is totally valuable, everybody needs to pay the bottom attainable quantity for any product, and the identical applies to insurance coverage insurance policies as effectively. Third social gathering automobile insurance coverage is necessary in India; therefore, each automobile proprietor
has to purchase a minimum of a fundamental automobile insurance coverage coverage earlier than they hit the highway. Nevertheless, most automobile house owners purchase insurance coverage with a pre-set notion that the premium paid will go waste in the event that they don’t make a declare. Therefore, they
negotiate with the insurance coverage agent and get fascinated by engaging offers and reductions.

Listed here are some the reason why you need to be cautious and never get fascinated by engaging offers on an insurance coverage coverage.

  • Decrease IDV: If you negotiate with an agent for economical automobile insurance coverage, he might cut back your car’s insured declared worth (IDV). As an illustration, say the ex-showroom value of your automobile is INR 10 lakhs and
    its IDV after depreciation is INR 8.5 lakhs. For this, the insurance coverage agent might ask you to pay a premium of INR 25,000. Nevertheless, you negotiate with the agent and he brings down the premium to INR 22,000. He should have executed so by
    lowering the IDV of your automobile to INR 7.5 lakhs. Chances are you’ll not know this till you make a declare and obtain a low payout.

  • Greater voluntary deductible: That is the quantity you comply with pay out of your pocket in case your automobile meets with an accident. Many instances, insurers improve the voluntary deductible to decrease the premium quote. When
    a automobile accident occurs, you’ll have to pay an enormous quantity out of your pocket.

  • Inflating the worth of a regular coverage: Some brokers improve the worth of a regular automobile insurance coverage coverage after which supply a reduction on the premium to impress and entice patrons. Therefore, it’s
    smart to perform a little research earlier than shopping for a coverage.

  • Elimination of add-on covers: If you attempt to discount with the agent to decrease the premium, he might take away some add-on covers out of your coverage. Sure add-on covers are necessary and eradicating them can value you extra
    in the long term.

Elements affecting the premium of a automobile

  • Automotive make and mannequin: In case your automobile has a number of security options and locking mechanisms, the danger of it getting stolen is much less. Therefore, the premium may also be decrease when in comparison with a automobile with fewer security
    options. Nevertheless, you must pay the next premium for a sports activities automobile due to the upper dangers of theft and accidents.

  • Insurance coverage sort: The automobile insurance coverage premium may also depend upon the kind of insurance coverage you are taking. In the event you take a fundamental third-party insurance coverage cowl, the premium might be low. Nevertheless, in case you take a
    complete automobile insurance coverage coverage with wider protection, the premium might be comparatively greater.

  • Add-on covers: Insurance coverage corporations supply totally different add-on covers, equivalent to zero depreciation cowl, no-claim bonus safety, engine and gearbox safety, emergency help cowl, return to bill and
    downtime safety. The extra add-on covers you select in your coverage, the upper might be your coverage premium.

  • No declare bonus: If you don’t make any declare throughout the coverage yr, the insurer will supply no declare bonus. With this, it can save you as much as 50% in your automobile insurance coverage premium.

  • Voluntary deductible: That is the amount of cash you comply with pay throughout declare settlement. Therefore, the upper the voluntary deductible, the decrease might be your automobile insurance coverage coverage premium.

Tricks to cut back automobile insurance coverage premium

  • Enhance voluntary deductible: If you wish to pay a decrease premium in your coverage, you possibly can select the next voluntary deductible.

  • Don’t declare for reasonably priced bills: This may assist accumulate your no declare bonus and cut back the premium.

  • Set up anti-theft units: These units safeguard your automobile and cut back the possibilities of making a declare. Therefore, the insurer will cut back your insurance coverage premium.

  • Examine premiums on-line: Use an internet premium calculator to calculate and evaluate coverage premiums simply. You can too get higher offers and reductions on-line and purchase automobile insurance coverage with none paperwork.

  • Switch NCB: When shopping for a brand new automobile, switch the gathered NCB of your previous automobile to the brand new one. This may cut back the insurance coverage premium in your new automobile.

  • Stop coverage lapse: Renew your automobile insurance coverage on time to keep away from a coverage lapse. That is necessary to qualify for NCB.


A automobile insurance coverage coverage is a vital product that must be taken after cautious thought and analysis. Additionally, don’t get swayed by the offers and reductions that insurance coverage brokers supply when buying a coverage. Many
instances, brokers comply with the low cost you ask for on automobile insurance coverage premium by lowering the IDV of your automobile or eradicating the add-on covers. Therefore, learn the coverage high quality print rigorously to keep away from wrong-selling and

Disclaimer: The above data is for illustrative function solely. For extra particulars, please check with coverage wordings and prospectus earlier than concluding the gross sales.

This weblog has been written by 

S. Gopalakrishnan | Motor Insurance coverage Professional | 40+ years of expertise in insurance coverage trade

A veteran in insurance coverage trade. S. Gopalakrishnan is a reputation to reckon with within the discipline of reinsurance, he has headed the Reinsurance division and has wealthy expertise in different fields of motor insurance coverage. He likes to share his opinion
on newest matters within the insurance coverage trade and the way he can assist folks in safeguarding their belongings utilizing insurance coverage merchandise.

Few Different Articles:


Leave a Reply

Your email address will not be published. Required fields are marked *