Discounts on your car insurance premium

Do you think you are paying too much for your car insurance? Did you know that you can be eligible for some discounts that can help reduce the amount you pay? Here we share with you some ways in which you can pay a lower premium for the same amount of car insurance coverage.

1. No claim bonus: A no claim bonus is a discount that is given to you or the driver of your vehicle for safe driving.

If you have had a very safe driving record in the past year during, and have not been involved in any accident, and therefore have not filed any claim with the insurance company, then in the eyes of the insurer you are considered to be a safe risk. So, as a reward for your safe driving you become eligible for a "no claim" bonus. For example, you can get a bonus of 20% on the own damage premium if you have made no claims in the first year of your policy. If you haven't made any claims for two years, the discount rate increases to 25% at the time when you are ready to renew your policy. The maximum no claim discount goes up to 50% of the own damage premium.

Your track record as a safe driver can be carried over to the insurance policy of any other vehicle you buy, whether a new car from a showroom or a second hand car, thus giving you the benefit of a no claim discount.

1. Voluntary deductible or excess: If you agree with the insurance company that in case of an accident, you will bear some part of the damage cost out of your own pocket before the insurance company's obligation to start compensating you, then the insurance company is willing to offer you a discount for sharing in the cost. Any damage in excess of this cost borne by you will then be borne by the company. For example, you chose to bear up to Rs 3,000 of damage costs. Lets say you have an accident and the claim arises to Rs 10,000. You will bear the first Rs 3,000, and the amount in excess of this, i.e., Rs 7,000, shall then be borne by the insurer.

All policies require that you will bear the first Rs. 500 or Rs. 1,000 of damage suffered, as per the cubic capacity of your vehicle. At the time of taking the policy you can volunteer to bear higher than this minimum stipulated amount if a claim were to arise. In technical terms this is called a deductible, i.e., the amount the insurance company will deduct from you before it pays out on your claim. As show in the table below, the higher the deductible you agree to, the higher the discount the insurance company will give you on the premium amount.

Amount that you volunteer to bear (in Rs.)	Discount on own damage premium
2,500	20% subject to a maximum of Rs. 750
5,000	25% subject to a maximum of Rs. 1,500
7,500	30% subject to a maximum of Rs. 2,000
15,000	35% subject to a maximum of Rs. 2,500

1. Memberships discount: Are you a member of a recognized automobile association like Automobile Association of India, Western India Automobile Association or Automobile Association of Eastern India? If so, you can get a discount of 5% on the own damage premium, subject to a maximum of Rs. 500 on the car. By paying whatever membership dues you pay to the association, you can get the additional benefit of cheaper car insurance.

1. Anti-theft discount: If you have installed an anti-theft device like an alarm or locking system approved by Automobile Research Association of India (ARAI), you can avail a discount of up to Rs. 500. This is because by installing an anti-theft device, you have reduced the chances of a theft, thereby reducing the insurance company's risk as well. So, the insurance company is willing to reduce your premium.

1. Discount on vintage cars: If you buy a vehicle certified as a vintage car by the Vintage and Classic Car Club of India, you are eligible to a discount on the premium by the insurer. The discount amount can vary depending upon the car and the insurer.

1. Discounts for handicapped persons: Handicapped persons can avail a discount of 50% on the own damage premium provided that the vehicle has been modified for use. The discount is also available for institutions exclusively engaged in the service of the handicapped.

So next time your car insurance comes up for renewal, don't just blindly renew it without understanding what discounts you might be eligible for.

 

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