Car sales in India have finally picked up steam this festival season after battling the slow pace of the pandemic and resulting supply chain challenges. Buyers are making the most of this post-pandemic recovery which is reflected in car sales across the country hitting a new monthly record of over 3.5 lakh units in September 2022 ahead of Diwali. It is no wonder that people wait for festivals like Dhanteras to buy a car because of the huge discounts and deals.
In addition to great discounts and deals, there’s another crucial area where you can save money: your auto insurance premium. As is well known, motor vehicle insurance is a legal obligation and is also essential for road safety. When people look for ways to save fuel and the retail price of a car, they often forget to consider premium costs. So if you bought or plan to buy a car this festival season, here are ways to lower your premium costs and increase your savings.
Driving less? Opt for pay-per-drive insurance
Technology-enabled pay-for-driving (PAYD) is a new concept introduced by the Insurance Regulatory and Development Authority of India (IRDAI) at the height of the pandemic in 2020 as a regulatory sandbox policy. The PAYD car insurance model is a usage-based approach in which the policyholder purchases mandatory liability insurance, but the self-injury component depends on the use of the vehicle. The regulator recently launched the model as a plug-in to help consumers save on premiums. With a tracking device or mobile app, it is possible to track the distance traveled in kilometers and base the award on that. Alternatively, insurers also offer policies that allow you to deactivate your insurance on days when you don’t want to drive your vehicle. Ideally, this works best for people who work in a remote setup or hybrid model, or anyone who doesn’t drive often and prefers public transportation or taxis.
Drive safely? Select the Pay As You Drive add-on
Until recently there was no mechanism to reward good behavior other than the Bonus Penalty or PNE.
However, IRDAI recently introduced the “pay how you drive” model, which tracks driving habits and profiles and rewards them with a premium discount for good driving. Someone who obeys the rules and drives safely may pay a lower premium than someone who breaks the rules or exceeds the speed limit. It is an excellent complement not only to reducing but also to maintaining road safety.
Do you have multiple cars? Opt for a familiar floating font
In India, there is no shortage of families whose members own individual cars. However, this does not mean that they are all used at the same time. People often book a larger SUV for long trips and use smaller cars for daily needs. In such a case, you do not have to pay the uniform annual premium for all cars.
You can opt for a floating family plan where all your vehicles are insured under one blanket plan and the premium automatically goes down.
Consider the franchise
Deductibles, also known as voluntary deductibles, in relation to car insurance are the deductibles that the insured person is willing to pay in the event of a loss. The deductible must be chosen carefully and according to your risk profile.
For example, if you leave the deductible at zero, you will get the full amount of the damage without having to pay anything out of pocket, but you will have to pay a higher premium.
On the other hand, if you’re a safe driver and less prone to injury, you can choose a higher deductible and save on your premium. However, please note that a mandatory deductible of Rs 1.00 applies even if you choose the optional zero deductibles.
Take advantage of the discount without claims
As already mentioned, the bonus penalty is the most popular method of reducing the cost of bonuses. This is a bonus that an insurance company gives the policyholder for taking good care of the car and making no claims during the year.
This means that the insured person saves money for each year without claims, either by benefiting from attractive discounts or by paying lower premiums when taking out or renewing the insurance. For example, the regulations say that you are entitled to a reduction of up to 20% in the first year, a reduction of 25% after two years, a reduction of 35% after three years, and a reduction of 45% after four years. if no claim is filed…
However, this bonus also expires if you claim a loss, no matter how small, or if you do not renew your insurance within three months after the policy expires. Therefore, it is not advisable to complain about minor damage and pay for it yourself.
Also, remember to transfer your bonus when buying a new car when taking over an old one. You can also opt for the non-loss guarantee so that it is maintained even in the event of a loss.
In addition to the tips above, to save more, it’s best to compare different policies and features online before making a purchase decision. Also, read the fine print and understand the hidden costs before choosing your preferred font.