Bajaj Allianz
Car insurance is mandatory in India, but do we really understand how it works? While the typical insurance policy is valid for a year, premium amounts may vary during your ownership. Contrary to popular belief, premiums may increase even if you don't make any claims or as your car gets older. So, what dictates insurance premiums going up, even if you're being mindful enough?
One of the most vital contributing factors is the Third Party Insurance Cover, mandatory for all vehicles plying on public roads as per the Motor Vehicle Act 1988, that insures your vehicle against any third-party damages that occurred in the event of an accident. Third-Party premium rates are typically subject to revisions annually, depending on various factors. Ministry of Road Transport and Highways in consultation with the Insurance Regulatory and Development Authority of India (IRDAI), regulates this premium.
However, in addition to the standard considerations that impact premiums (claim history, geographical location, insured declared value etc.) there are also a number of other factors that can reflect in you shelling out a higher premium. Some of these reasons are as follows:
1/ Vehicle Age & Renewal Gaps*
An ageing car, even if it’s in good condition, makes it more prone to damage. This makes insurance companies charge higher premiums. Additionally, a delay in renewing the insurance policy and a long gap between the two policies may also result in a higher premium, especially if the insurance company needs to inspect the car.
2/ Cover Choice*
Choosing an add-on cover, such as an own-damage cover or opting for two separate policies instead of a comprehensive one, can also lead to higher premiums. Always make an informed decision and think ahead to remain frugal with your insurance transactions.
3/ Driver Profile*
A driver with a track record of filing frequent claims is easily under more scrutiny by an insurance provider. Causing accidents and subsequently filing claims makes you a less-than-ideal driver for a service provider – in addition to putting your own life at risk, that is. So, drive safe and pay lesser for your car insurance policy.
4/ Modifications*
You might want to make structural or mechanical modifications, essentially those which alter the performance of your vehicle. This can have a direct impact on your insurance premium, especially if an inspection is involved owing to a renewal delay. If you’re not from the ‘stock is best’ school of thought, a higher insurance premium shouldn’t come to you as a surprise.
In addition to being mindful of the above aspects, here are a few quick steps to ensure you lower your car insurance premium:
1/ Avoid small claims
2/ Renew your car insurance on time
3/ Renew insurance through the insurance provider’s website
*Standard T&C Apply
On the whole, car insurance isn’t as complicated as it seems. It’s a simple convenience that can prove to be a boon in a difficult situation and it is, thus, imperative that you use it well. Do read policy documents carefully before you purchase a policy and ensure you understand what you’re signing up for. Go ahead, and make those savings while still staying on the right side of the law!
**Insurance is the subject matter of solicitation. For more details on benefits, exclusions, limitations, terms and conditions, please read the sales brochure/policy wording carefully before concluding a sale.
