Your Complete Guide to Save Money on Car Insurance Policy Renewal

We keep hearing the phrase “times have changed” more often than our liking. However, they have indeed when it comes to buying a car insurance plan at least. Now, you can buy a car insurance policy right from the comfort of your sofa or bed without having to spend a lot of time dealing with insurance agents or company representatives.

And with the advent of newer methods and technology, there are better and more efficient ways to save money on your policy. If your policy is due for renewal in a matter of few days, here are some efficient and proven ways to save money.

-          IDV

The IDV or insured declared value of your vehicle plays a crucial role in deciding the premium for your policy. In fact, it is one of the cornerstones of a car insurance policy. The IDV is the maximum amount that an insurer is willing to pay for your vehicle at that point in time. To put it in other words, if your car was to get damaged beyond repairs or was stolen, your insurer will compensate you with the IDV at the maximum.

It should not come as a surprise, that the IDV has a direct correlation with your policy premium. A higher IDV translates to a higher premium and vice versa. However, as a policy buyer, you do have the option to play around with your vehicle’s IDV. Which means you can potentially reduce your insurance premiums. However, a word of caution here. One must not try to bring down the IDV dramatically to save on premiums as it might have negative impacts in the future.

-          NCB

 The NCB or the no claims bonus can be an excellent friend that can help you save considerably on premiums. An NCB is a discount that the insurers offer to the policyholders for being safe drivers. If you haven’t claimed your car insurance policy in the previous policy term(s), you can avail this discount during renewal. For every year that you do not claim the policy, you earn a certain amount as a discount. It starts with a minimum of 20% for the very first year and goes all the way up to 50% for five consecutive years.

One thing to keep in mind is that the discount is applicable to the own damage component of the policy and not the entire premium. On the other hand, insurers grant the NCB to the policyholder and not the vehicle. This means, that if in future you decide to sell your vehicle or change the insurer, you can still avail your NCB.

-          Membership

There are a few organizations, which can help you save money on renewals. If you are a member of any of the recognized automobile organizations, you can avail certain discounts. For example, being a member of the Automobile Association of India can help you save about INR 500 during your policy renewal.

o   Automobile Association of Southern India

o   Automobile Association of Eastern India

o   Automobile Association of Upper India

o   Western India Automobile Association

You simply need to furnish the membership details during you can insurance policy renewal.

-          Voluntary Deductible

A deductible is a component of your car insurance that a lot of people do not take a closer look at. Should you opt to make a claim of your car insurance policy, the coverage will only kick in if the total amount exceeds the deductible. You can use this component for lowering your insurance premiums as well. As a policy owner, you have the option to set a voluntary deductible as per your choice. If you set a higher deductible, you will end up paying lesser as car insurance policy premium. However, one must be careful with not setting the value too high, as you will have to pay that amount every time you claim your policy.

-          Renew Policy on Time

There are a lot of things that can go against you if your car insurance policy has expired. And not renewing the policy on time can add to the woes. Thus, it is important to keep a tab of the dates and never forget to renew them on time. Some insurers offer a grace period to renew the policy in case you miss the renewal due to genuine reasons such as health hazards. However, if you fail to renew within 90 days, the policy will lapse. You will have to apply for a new policy which might involve the inspection of your vehicle. A policyholder also runs into the risk of losing out on the NCB bonus by not renewing on time.

-          Go Online

Shopping online has slowly yet steadily become an irreplaceable part of our lives. The next obvious question is, why not insurance? You can opt to buy your car insurance policy online and reap a lot of benefits of the same. For starters, the entire process is quicker than the traditional method. The amount of documentation and form filling is also less. And most importantly, it costs less to buy online policies as well. One of the best caveats being, you can compare policies.

When you compare different policies, you get to know the features and benefits even before buying a policy. And you get to know the quotes provided by different insurers for the same car. This can help you save a considerable amount of money on your car insurance plan renewal.

The above is some of the most effective steps which can help you choose a better car insurance plan during your renewal. And if done carefully, you can save a substantial amount of money on it as well. But more than anything else, do not forget to insure your car.

The Indian law mandates all the cars to have a valid car insurance policy on them at all times. Meaning, if you drive around without one, you are looking at some hefty fines. And secondly, a car owner is liable to pay for any damages right out of their pockets if they do not have a car insurance policy. If you do not already have, you must get one at the earliest.