How to save money while renewing car insurance policy

Mohit’s car insurance policy was expiring. His insurer was offering to renew his policy, but he wanted to pay a lower premium. He didn’t know how to renew his car insurance policy and at the same time, save money. When he contacted his friend for advice a perfect solution was given. Mohit was overjoyedthat he would not only renew car insurance policy,but also save a few hundred bucks in the process. So, what did he do?

A car insurance policy is an annual insurance plan, which requires regular renewals. There are ways to save money when you renew car insurance policy, which Mohit followed. Let’s see what he did:

• He went online and compared the different car insurance policies: The online marketplace is the perfect way to renew your car insurance policy. By visiting online brokers, like Coverfox.com, you can see all the available car insurance policies. By comparing the different policies you can choose a plan which offers you the best protection at the most competitive rate. Thus, when you compare the coverage and the premium, shortlist a plan and then renew your policy online, you can save money. Mohit did so and so you should.
• He calculated the correct IDV: Insured Declared Value, or IDV as it is popularly called, is the Sum Assured of your car insurance policy. IDV is calculated by adjusting the market price of your car with relevant depreciation. IDV is the amount which is paid when your car is irreparably damaged or stolen. IDV also affects the premium rate. Higher the IDV, higher would be the premium. Mohit computed the estimated IDV of his car correctly. He then chose a policy which promised him the computed IDV and saved money by not paying premiums for a higher IDV.
• He used his accumulated No Claim Bonus: When you do not make any claim on your car insurance policy, you are entitled to a discount in the subsequent year’s renewal premium. This is the No Claim Bonus feature of your car insurance policy. The NCB increases after every subsequent claim-free year up to a maximum of 50%. This NCB can be utilized to get a discount on the renewal premium.

Mohit had bought his car and the associated car insurance policy three years ago and never made a claim. As such, he had an accumulated No Claim Bonus of 35%. He used this bonus and got a 35% discount on his premiums.

• He chose a higher voluntary deductible limit: Every car insurance policy provides you the option of choosing a limit of voluntary deductible. This limit denotes the amount of claim which would be borne by you. In case of a claim, you have to pay the voluntary deductible limit out of your pockets while the insurer pays the rest. This voluntary deductible gives you a premium discount. Mohit did not have a voluntary deductible in his existing policy. However, on the advice of his friend, he chose a deductible limit of Rs.1000 on renewal and got a premium discount.
• He became a member of AAI: Insurers offer a premium discount if you take a membership of Automobiles Association of India (AAI) or Western India Automobile Association (WIAA). He became a member of AAI, got a premium discount and saved money. You can too.
• He installed anti-theft devices: If you increase the safety of your car, you can get a discount and save on your premiums. Mohit installed an anti-theft device in his car, thus increasing the car’s security. Besides the enhanced security, he also got a premium discount. A win-win situation for him, wasn’t it?
• Finally, he renewed on time: The NCB is lost if the policy expires and you do not renew it within 90 days of such expiry. Mohit knew this and renewed his policy well before expiry and saved 35% in the premium amount by utilizing his No Claim Bonus discount.

Though renewals of your car insurance policy are legally mandatory (the Motor Vehicles Act mandates a valid car insurance policy for every car), they can be economical too. If you follow the above-mentioned tips, then, like Mohit, you too can save money while renewing your car insurance policy. So, go online, compare between the available plans, use aforementioned tips and save money on car insurance renewals. And don’t forget to timely renew car insurance policy!