How to reduce your car insurance premium
You can plan to reduce the insurance premiums paid on your vehicles. According to the Motor Vehicle Act, a vehicle cannot be driven on the road unless and until it is insured. The insurance is renewable each year. Vehicle insurance is a pre-requisite to vehicle ownership.
If a vehicle's insurance policy is not renewed, driving that vehicle is illegal. Also, if the vehicle has an accident, the insurance company will not pay out any claims.
All no claims bonuses will also be forfeited. You can renew your auto insurance with another insurer, including the bonus accrued at your earlier insurer.
The risks covered by a third party policy include death or injury to a third party and damage to third party property. Liability in the case of death or injury is unlimited.
A comprehensive motor insurance policy provides cover against damage caused to your vehicle due to man-made or natural calamities too.
A motor insurance policy covers your vehicle against:
Natural calamities
Man-made calamities
Personal accident
Third party legal liability
Any permanent injury /death of a person
Any damage caused to property Previously, the premium was mainly based on geographical zone, engine capacity, price and age of the vehicle. Now, a number of other factors are also considered to arrive at the premium. One can avail a discount on the premium and reduce it by up to 25-30 percent.
Discount on premium
The most important discount is the no claim bonus. In case you haven't made a claim against your vehicle insurance in a given year, you get the benefit of no claims bonus in the form of a specific percentage reduction in your premium in the subsequent year.
No claim bonus increases with each claim-free year. It may go as high as 50 percent on the 'own damage premium' component of the vehicle insurance premium.
Voluntary deductible discount
In addition, the insurance companies also offer a discount on your vehicle premium if you bear a certain amount of loss associated with each claim.
Voluntary deductible is the amount that you agree to pay yourself towards a claim before the insurance company pays up the balance. The higher the voluntary deductible that you agree for, the lower your premium will be.
The discounts associated with this feature range between 20 and 35 percent of the premium, subject to a maximum of Rs 3,500.
However, you need to review the amount of voluntary deductible against the 
discount to ensure the discount amount will actually be higher than the voluntary deductible.
Premium depends on make, model
Premiums depend on the make and model of the vehicle. Each model has its own claim record and the insurer prices the vehicle based on its claim experience.
Some models may be more claimprone because of their structure or usage, and the premium will factor in all these facets. Some models have high repair costs and the premium is affected by this.
Source: Economic Times
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