As a car owner, it is important to choose the appropriate car insurance to cover your vehicle financially. This contract safeguards you from losing money if there is any accident or damage to the car. With the presence of different digital insurance providers, such as ACKO, selecting the right insurance policy is done by focusing mainly on your coverage requirements and budget online.
Even though purchasing a vehicle policy may seem quite expensive, there are a few ways to cut costs on the premium without compromising on the coverage and add-ons. So, to have a detailed idea, go through our guide and save your pocket as much as possible.
Tips to Reduce Your Car Insurance Premium Without Compromising Coverage
Here are a few tips to follow to reduce your car insurance premium without compromising coverage:
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Online Comparison of Car Insurance
One of the most reliable methods of reducing insurance costs is comparing car insurance rates from different providers. Different companies evaluate risk factors differently, resulting in different premium quotes for the same individual.
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Maintain a Clean Record of Driving
Your driving history plays a crucial role in influencing your car insurance premium. If you have no history of accidents, traffic violations, or claims, your premium will be low.
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Choose a Bundled Policy
Many insurers offer discounts if you choose bundled policies, which include health and car insurance. This not only helps simplify your billing but also enables you to save a huge amount of money.
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Maintain a Healthy Credit Score
Insurers, while determining your car insurance premium, also verify your credit score. A high credit score leads to low rates of insurance.
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Review Coverage Annually
The requirements of your insurance might change over the period, so make sure to review your policy regularly. If your car is old, do not consider its comprehensive coverage if the cost is more than the value of the car.
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Opt for a Higher Deductible
The deductible refers to the amount you need to pay out of your pocket before considering car insurance coverage. Opting for a higher deductible enables reducing your annual premium.
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Choose Pay-as-You-Drive Insurance
PAYD or Usage Based Insurance ask for premiums considering the total distance you have travelled your car. The less you drive, the less will be your car insurance premium. Hence, if you choose to drive your car occasionally, the premium amount might be reduced by choosing PAYD insurance.
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Install Anti-Theft Devices
Installing anti-theft devices provides an additional layer of defence against theft. This enhances the car’s risk profile and, moreover, the premium amount. Because the theft risk is less in comparison to a car with no anti-theft device, the insurance premium amount will be less.
However, the Automotive Research Association of India must approve the anti-theft devices that you intend to install in your car.
Factors Affecting Car Insurance Premiums
Car insurance companies consider several factors to assess the risks associated with your vehicle. The higher the risk, the more will be the premium amount. Here are the key factors to consider affecting car insurance premiums:
- Age of the Car: Older cars tend to cause more trouble than brand-new cars. Hence, the premium increases with the age of your car.
- Coverage Type: Choosing the right insurance will provide you with comprehensive coverage for a car in comparison with third-party insurance. Thus, for comprehensive coverage, the car insurance cost is higher.
- Model of the Car: The repair costs or costs of replacement of parts is higher in luxury cars than old ones. Thus, the premiums in these cars are also higher.
- Car Engine Capacity: Cars with high engine capacity pose greater risk to the insurer, so their insurance premiums are higher.
- Location of Registration: Cars tend to get more damaged in places such as mountains, urban areas, densely populated cities, and places with high crime rates. Hence, if you reside in any of these areas, your insurance premium will be higher.
- Modifications in Car: If you have modified your car, you might have to incur more loss in case of damage to the vehicle. Hence, the insurer needs to pay a higher car insurance premium for a modified car.
Final Thoughts
Applying these tips to lower car insurance premiums can let you track your expenses while still maintaining comprehensive coverage.
