Whether you drive your car often or not, you must have a minimum insurance cover. Drivers who don’t use their car often hesitate to renew their motor insurance policy. However, not having valid insurance at all times is unlawful, and if you are caught driving without insurance, you can be either charged with a traffic fine or may even face imprisonment. Today, in this post, we will discuss how you can save a significant amount on car insurance premiums.
6 proven tips to lower your car insurance premium:
- Compare policies
Whether you use your car frequently or not, policy comparison should always be a priority when shopping for car insurance. Check different insurers’ rates and offers, the scope of coverage, claim settlement ratio and more before making a decision. Thorough comparison can help you save a significant amount on a motor insurance purchase.
- Re-evaluate your policy
If you used to drive your car frequently but have lately stopped doing so, you should re-evaluate your car insurance policy. Most of the time, car owners who keep their cars in the parking lot do not require high coverage due to the lower risk involved. Therefore, by lowering the benefits of your motor insurance, you can save a significant amount on car insurance premiums.
- Focus on earning No Claim Bonus (NCB)
Drive safely, and if you manage to go claim-free for a year, you can save a significant amount on your car insurance premium through the No Claim Bonus or NCB. The NCB percentage can range between 20% to 50%. If you are not sure how to earn NCB in a motor insurance policy, refer to the table below.
|Number of claim-free years||Insurance renewal discount via NCB|
|First policy year without any claim||20%|
|Two consecutive policy years without any claim||25%|
|Three consecutive policy years without any claim||35%|
|Four consecutive policy years without any claim||45%|
|Five consecutive policy years without any claim||50%|
- Go for higher deductibles
Deductibles refer to the amount that you, as a policyholder, need to bear from your pocket before your car insurance provider starts paying up for the loss or damage. During the claim settlement process, if the claim value is lower than the deductible, your insurer is not liable to pay for the amount. Deductibles are of two types—compulsory and voluntary deductibles. By choosing a higher voluntary deductible, you lower your insurer’s liability, and in return, the motor insurance company will charge you lower policy premium. However, in an attempt to lower your premiums, make sure you don’t opt for a deductible so high that it’ll deplete your savings at the time of a claim.
- Avoid unnecessary add-ons
Add-ons in car insurance are meant to enhance the scope of your motor insurance policy. These add-ons are available after paying an additional amount over your policy premium. Some of the well-known car insurance add-ons are roadside assistance cover, zero depreciation cover, return-to-invoice add-on, and engine protection cover. Remember, not every add-on is needed by every driver. Those who frequently drive their car over long or lonely highways would benefit from roadside assistance. Similarly, NCB protection add-on and return-to-invoice cover are appropriate for those who roughly drive their car or frequently drive through dangerous or accident-prone areas.
Add-ons raise the cost of your car insurance policy’s premium. If you don’t pick the add-ons carefully, you will merely be adding to your financial burden.
- Anti-theft device installation
If you have given your car a long break by sending it to the parking lot for a long and dull vacation, don’t think you have saved it from all the uneven consequences. If you don’t drive your car too often, you may be able to avoid an unfortunate incident such as an accident, but the risk of theft remains high. However, when you install an anti-theft device or other safety feature to your car, the risk of theft is reduced significantly, lowering your car insurance provider’s liability. As a result, they’ll charge you a lesser motor insurance premium.
Saving on your car insurance premium is not a difficult task. All you need is a thorough comprehension and knowledge of the motor insurance policy. Even if you are a newbie, the above ideas can help you save a lot on insurance premiums.