Buying a car is a dream come true for a lot of people. After all, a good four-wheeler doesn’t come cheap today and most people have to take a loan for the same. Thus, when you do get a car, it makes sense to get a comprehensive insurance cover too. In fact, you are required by the law to get at least a third-party insurance cover.
Now, a car insurance cover is important. However, you don’t have to pay a high premium for the same when there are many ways to enjoy better rates such as:
1. Premium Comparison
Thanks to the Internet, you can compare your car insurance options easily, and you absolutely must! This is because you will see that the car insurance premium varies greatly just like the car loan interest rate. There are so many car insurance providers today but you can’t find the best deal unless you do some research.
2. Picking the Right Plan
Even though you can pick the basic car insurance plan which is the 3rd party coverage to meet the minimum requirement as per the law, it’s recommended that you get a comprehensive cover instead. This is because apart from the basic cover, it also covers fire hazards, damage due to natural calamities, thefts, etc. That said, you can still save a lot of money on the premium by picking the right plan.
If you want to enjoy a low car insurance premium, then you can choose a la carte insurance format. In this, instead of paying a premium for all kinds of risks, you can select just a few. For instance, you can get the 3rd party coverage and add engine coverage and theft coverage only. This can greatly lower your premium amount.
3. Improved CIBIL Score
Did you know that a low CIBIL score can increase your car insurance premium? The insurers today take all kinds of factors into considerations when calculating your car insurance premium, and your credit score can easily be one of them.
By increasing your credit score you can get an upper hand when negotiating your insurance amount with the insurer. In addition to that, you can enjoy a low car loan interest rate too because a high score increases your creditworthiness and increases your chances of loan approval and attractive interest rates!
4. Avoiding Expensive Modifications
If you have installed expensive gadgets in your car, then naturally the repairs would be more expensive too. Plus, if there are modifications that have converted a standard four-wheeler into a sports-car, then it may raise concerns for your insurer and they may decide to increase the insurance premium expecting a higher chance of accident or car damage.
5. Balancing Voluntary Deduction Wisely
In a car insurance, there is this concept of “voluntary deduction”. As the name implies, it’s a fixed amount of money you agree to pay from your own pocket in an event of a car accident or car damage due to other reasons. So, this is the portion of expenses that you bear yourself, and the remaining amount is paid by the insurer.
Now, here is the thing- the higher the voluntary deduction amount, the lower premium you have to pay. Similarly, if you lower the amount, then the premium increases. Thus, you should take time to create the right balance that saves you the most money.
6. Taking Advantage of No Claim Bonus (NCB)
Do you know about NCB or No Claim Bonus? It’s a discount on your insurance premium that’s offered when you don’t claim the insurance for any repairs in a particular year. This discount which can be as high as 20% or even more is offered on the premium for the next year.
It’s beneficial to avoid raising claims for minor repairs as you can get a flat 20% discount on the insurance premium which can be worth a lot more.
If you have taken a car loan, especially with a low CIBIL score, then your EMIs can easily be high. So, paying the insurance premium can only increase the financial burden. That said, if you apply the information shared above, then you can easily save a lot of money. Good luck!
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