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How To Reduce Car Insurance Premiums

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How To Reduce Car Insurance Premiums


A car insurance plan is mandatory by law under the Motor Vehicle Act. Besides this, the policy ensures that your car is financially protected against damages due to accidents or other unfortunate events. Hence, it is wise to invest in a policy that offers extensive benefits to you and your vehicle.

But not many people are keen on investing in a comprehensive car insurance plan, mainly because the policy is expensive. What if we tell you that there are ways in which you can reduce your premiums? That’s right, you heard us! Let us discuss the same in elaborate detail.

Car Insurance Premiums

How can I reduce my car insurance premiums?

The following factors will help you reduce your car insurance premiums and save a fortune.

1. Choose a high voluntary deductible

When you buy any motor insurance plan in India, the premiums are determined based on the amount of claim you have chosen. Some insurers allow you to benefit from a voluntary deductible facility before deciding your premiums.

Voluntary deductible is the percentage of the claim amount that you willingly choose to pay from your pocket. Therefore, selecting a high voluntary deductible will impact the premiums of your motor insurance plan. The higher the voluntary deductible is, the lower your premiums will be.

You can use the motor insurance premium calculator to determine the charges on your chosen policy based on your preferred coverage and add-ons.

2. Opt for coverage you need

It is evident that the bigger the coverage is, the better it will be for you. However, it is not valid. The ideal car insurance plan for you is a policy that fulfills your needs and offers you maximum benefits at an affordable rate.

But it does not mean that you have to opt for all the benefits put forth by the insurer. It serves the right to choose a coverage amount wisely, impacting the premiums you pay towards your car insurance plan.

If you do not want specific add-ons on your plan, you do not need to opt for them. Do not pay for the benefits you don’t need or cannot afford at the given moment.

3. Avoid making small claims

When you have a car insurance plan, it is tempting to claim every small expense that comes your way. It is highly advisable not to argue for minor repairs or dents that can be paid for by you quickly. Having a claim-free year on your car insurance plan is rewarding. You can accumulate the No Claim Bonus (NCB), which can avail discounts on the premiums during the policy renewal. Every time you make a claim, the NCB benefit is nullified.

To Conclude

Besides having to avoid getting a traffic challan, a comprehensive car insurance plan secures your vehicle in case of accidents, theft, and natural calamities. You can even compare different car insurance plans online and choose a policy that best suits your needs.

Eula Boone

I have written professionally since 2010 and have been an investor since 2015. My finance blog, economydiva.com, is one of the most visited blogs in the world, with more than 3 million readers a month. I love sharing what I know about investing, saving, and managing money and providing practical tips on how to be a smart and savvy money manager.