Skip to main content

CAR Insurance PREMIUM





These measures can help you save on your car insurance premium.

Motor insurance costs roughly 3-4% of the price of the vehicle in the first year. If no claim is made, it will progressively come down to about 1-2% by the fifth year. There are many ways to reduce this cost. For instance, experts advise against filing a claim for minor dents and scratches. It is more cost effective to get minor repairs done on your own than file a claim and lose the no-claim bonus. Here are a few other ways to bring down your car insurance premium.

TRANSFER NO-CLAIM BONUS

You can save big by transferring the no-claim bonus from your old vehicle to the new car. Agents don't tell you this because it hits their business. When you sell your old car, retain the insurance in your name. Take the no-claim certificate from the insurer and reserve the bonus if you are not buying a new car immediately. The accumulated no-claim bonus has to be transferred to the new vehicle within three years of the sale.If you have not made any claim for the past 4-5 years, the premium of the new car will come down by 50%.

OPT FOR A HIGHER DEDUCTIBLE

One way to reduce the insurance premium is by increasing the deductible component.This is the amount you are ready to pay from your own pocket when you make a claim. So, if you opt for a `5,000 deductible and the repair bill comes to `8,000, you will have to pay the initial `5,000 while the insurance company will pay only `3,000. Use this option very prudently.If you opt for a very high deductible only to reduce the premium, you will end up paying too much for repairs.

INSTAL ANTI-THEFT DEVICES

If you instal anti-theft devices in your car (such as a gear lock or a steering lock), the insurance company gives you a small discount of up to `200 or so. But these safety devices should be from authorised manufacturers. If you become a member of certain automobile organisations, there's another small discount offered on the premium.






Some of the add-on car insurance covers are really useful while others don't add much value. Find out which of these you should buy with the base policy.

The importance of car insurance is felt most when you are in a police station to report the theft of your ve hicle or at a workshop to get it re paired after an accident. In both situations, a proper cover would ensure that you don't lose money due to the unforeseen turn of events. Even so, while a standard car insurance policy will reimburse your loss, your wallet will also feel the pinch. There are always some expenses that a comprehensive policy will not fully cover. This is where add-on car covers come into the picture. General insurance companies offer a range of optional covers that give additional cover to your car along with the base motor insurance policy. We looked under the hood of each of these additional covers to understand what they offer and how they work. Some of these covers are really useful and don't cost too much. But some of them are not very useful and can be avoided.

For our calculations, we have used the example of a Maruti Swift LXI model and taken premium quotes from the website of ICICI Lombard General Insurance. The premiums and benefits provided by other insurance companies may be different.

ROADSIDE ASSISTANCE

COST Rs 199

This is a very useful cover, especially if a woman or older person is driving. If the car runs out of fuel, gets a flat tyre or breaks down due to any reason, the insurance company will arrange for fuel, change the flat tyre or get it towed to nearest workshop. "If you have by mistake locked your key inside the car, the insurance company will even arrange for someone to pick up the duplicate from your house and deliver it to you," says Alok Bhatnagar, CEO of insurance portal EasyPolicy.com. All this comes for less than 60 paise per day, so don't even think of not including roadside assistance cover as part of your car insurance. In fact, so useful is this cover that some companies include this as part of the base policy. OUR ASSESSMENT Cheap and useful. Worth buying, especially if a woman or elderly person is driving.

ZERO DEPRECIATION

COST Rs 2.165

A standard car insurance policy will reimburse only the depreciated value of the car parts damaged in the accident. Insurers deduct the depreciated value from the claim.This is not a problem in case of low priced cars because the parts are cheap. But if the car costs upwards of `10-12 lakh, the cost of a new part can be high. A simple plastic bumper can cost `12,000-15,000. But a zero depreciation add-on cover will reimburse the full value of the part. However, cars older than 5-6 years are usually not covered. Also, experts say safe drivers should not spend on this cover. "If you haven't made a claim in the past few years, zero depreciation cover doesn't make sense," says Rakesh Jain, CEO of Reliance General Insurance (see interview on page 13). OUR ASSESSMENT Useful cover for costlier cars.

ENGINE PROTECT

COST Rs 650

COST `650 If you read the fine print of any car insurance policy, you will discover that own damage does not include damage to engine caused by negligence or wear and tear. For instance, if your car is standing in a water-logged area and you turn on the ignition, there is a high chance that your engine can get damaged. Or if you run your car without engine oil, the car can stall. Few people will face such situations, but if you are among this careless lot, take an engine protect add-on cover.This covers engine damage not caused by an accident. Insurance sellers say this cover is worth purchasing because the cost of repairing the engine can be prohibitively high. At the same time, a little basic care exercised by the owner can prevent such damage.OUR ASSESSMENT Cheap but avoidable cover, unless you are the careless type.

CONSUMABLES COVER

COST Rs 866

COST `866 After an accident, car repairs take up a lot of consumables such as engine oil, brake fluid, coolant and minor nuts and bolts. These small expenses can push up the overall bill significantly. Engine oil costs about `2,500-4,000 per fill. Coolant can cost `350-500.Brake fluid adds another `200-250. A standard car insurance policy will not reimburse the cost of these consumables. They are usually excluded in the cover. But for a small price, you can get these items reimbursed. Keep in mind that this cover will be useful only if these consumables are used in the repair.OUR ASSESSMENT Worth considering as consumables are costly.

DAILY GARAGE ALLOWANCE

COST Rs 2000

COST `2,000 How will you manage without a ve hicle when your car has gone for re pairs? For those who are heavily de pendent on one vehicle and in loca tions where public transport is not an option, this can be a tough question to answer.This add-on cover can come handy in such times. It provides a daily allowance of `500 for up to 14 days if the car is in the workshop for more than two days. The compensation amount and the number of days can vary across insurers. But this benefit is payable only if the car is repaired at an authorised garage. Experts feel this benefit is not of much use unless you have no other mode of transportation.OUR ASSESSMENT Costly benefit that most people can avoid.

ACCIDENTAL COVER FOR PASSENGERS

COST Rs 500

COST `500 This is essentially a personal accident cover and provides compensation to passengers in case of death or disability caused by an accident. The maximum cover provided may vary across insurers but the price is usually `125 per `50,000.Bhatnagar feels this cover is not really needed because most people already have medical and life insurance. This add-on can be avoided.OUR ASSESSMENT Not meaningful because insurance cover is too low.




-----------------------------------------------
Invest Rs 1,50,000 and Save Tax under Section 80C. Get Great Returns by Investing in Best Performing ELSS Mutual Funds

Top 10 Tax Saver Mutual Funds to invest in India for 2016

Best 10 ELSS Mutual Funds in India for 2016

1. BNP Paribas Long Term Equity Fund

2. Axis Tax Saver Fund

3. Religare Tax Plan

4. DSP BlackRock Tax Saver Fund

5. Franklin India TaxShield

6. ICICI Prudential Long Term Equity Fund

7. IDFC Tax Advantage (ELSS) Fund

8. Birla Sun Life Tax Relief 96

9. Reliance Tax Saver (ELSS) Fund

10. Birla Sun Life Tax Plan

Invest in Best Performing 2016 Tax Saver Mutual Funds Online

Invest Online

Download Application Forms

For further information contact Prajna Capital on 94 8300 8300 by leaving a missed call

-----------------------------------------------

Leave your comment with mail ID and we will answer them

OR

You can write to us at

PrajnaCapital [at] Gmail [dot] Com

OR

Leave a missed Call on 94 8300 8300

-----------------------------------------------

 

Popular posts from this blog

Section 80CCD

Top SIP Funds Online   Income tax deduction under section 80CCD Under Income Tax, TaxPayers have the benefit of claiming several deductions. Out of the deduction avenues, Section 80CCD provides t axpayer deductions against investments made in specific sector s. Under Section 80CCD, an assessee is eligible to claim deductions against the contributions made to the National Pension Scheme or Atal Pension Yojana. Contributions made by an employer to National Pension Scheme are also eligible for deductions under the provisions of Section 80 CCD. In this article, we will take a look at the primary features of this section, the terms and conditions for claiming deductions, the eligibility to claim such deductions, and some of the commonly asked questions in this regard. There are two parts of Section 80CCD. Subsection 1 of this section refers to tax deductions for all assesses who are central government or state government employees, or self-employed or employed by any other employers. In...

ULIP Review: ProGrowth Super II

  If you are interested in a death cover that's just big enough, HDFC SL ProGrowth Super II is something worth a try. The beauty is it has something for everybody — you name the risk profile, the category is right up there. But do a SWOT analysis of the basket, and the gloss fades     HDFC SL ProGrowth Super II is a type-II unit-linked insurance plan ( ULIP ). Launched in September 2010, this is a small ticket-size scheme with multiple rider options and adequate death cover. It offers five investment options (funds) — one in each category of large-cap equity, mid-cap equity, balanced, debt and money market fund. COST STRUCTURE: ProGrowth Super II is reasonably priced, with the premium allocation charge lower than most others in the category. However, the scheme's mortality charge is almost 60% that of LIC mortality table for those investing early in life. This charge reduces with age. BENEFITS: Investors can choose a sum assured between 10-40 times the annualised premium...

What is Electronic Clearing Service (ECS)?

  As the name suggests, it's an electronic process through which money can be transferred from one bank account to another. According to RBI, this mode is usually used for regular payments and receipts, like distribution of dividend, interest, salary, pension etc. This mode is also used for collection of bills for telephone, electricity, water, various types of taxes, payment of EMIs , investments in mutual funds , payment of insurance premium etc. There are two types of ECS , like most other banking transactions, ECS credit and ECS debit. An ECS credit is used by a bank account holder , usually a large company or an institution for services like payment of dividend, in terest, salary, pension etc. If your mutual fund pays you dividend to your bank account, of all probability it is being paid through ECS credit.ECS debit, on the other hand, is used when a company or an institution is getting money from a large number of people. For example if you are investing in a mutual fund sc...

How to Pick Top Performing Mutual Fund Schemes

Download Tax Saving Mutual Fund Application Forms Invest In Tax Saving Mutual Funds Online Buy Gold Mutual Funds Leave a missed Call on 94 8300 8300   How to Pick Performing Schemes  Funds that continue to stay in the top grade of performance over longer periods are the ones to bet on, advise investment experts   The mutual fund performance charts of the past few months make for an impressive reading. Funds across all categories boast of stellar returns. Sample this: The mid and small cap category has averaged 77 percent return over the past 12 months, with the best fund delivering a staggering 120 percent. The tax-saving funds also average an impressive 51 percent, including a fund which has soared 92 percent. Many of the table-toppers are funds of proven quality and track record. However, there are also schemes that are not that well-known. Some of these have rarely made it to the performance charts in the past, yet, of late, they bo...

Bharat Bond ETF

Top SIP Funds Online   The government of India has paved the way for the launch of India's first corporate bond ETF called as Bharat Bond ETF. Edelweiss Mutual Fund will be managing it. The fund is mandated to invest in AAA-rated bonds of select public sector companies (see the table 'List of constituents and their proportions in the portfolio'). The government has a threefold objective behind launching this product. One, to deepen the liquidity of the Indian debt markets and provide a gateway for easy retail participation. Two, to solve investors' dilemma of picking premium bonds. Lastly, to help the underlying government-owned companies raise funding for their operations. But does it make sense for you, the investor, to invest in it? Lets find out. What is the product? As the name suggests, it is an exchange-traded fund which will be listed on a stock exchange from where its units can be bought and sold post launch. It will have two variants - one maturing in 3 ye...
Related Posts Plugin for WordPress, Blogger...
Invest in Tax Saving Mutual Funds Download Any Applications
Transact Mutual Funds Online Invest Online
Buy Gold Mutual Funds Invest Now