Motor Insurance is mandatory for all vehicles plying on Indian roads. It is one of the essential components when you purchase a vehicle. But traditionally in India, the dealer bundles motor insurance within the sale process to simplify the procedure. Moreover, this is also convenient as the financiers who extend vehicle loan include the cost of registration and insurance along with the price of the vehicle as component of loan amount.
The dealer continues to assist the car owner for renewal of insurance every year, and truly speaking this is mutually convenient. Though the dealer acts as a broker for insurance companies, it may be possible that you are missing out on better deals. There are ways and means to land a cheap motor insurance, thereby also reduce the cost of owning a car. Let us see what it actually means on the ground.
Types of Car Insurance:
Broadly, motor insurance can be classified into two types, depending on the cover and what they are meant to do.
1. Third Party Insurance: In this plan you are insulated from financial liabilities payable for harm and damage caused to others or their property in an accident involving your car. This policy is mandatory as per the Motor Vehicles Act 1988.
2. Comprehensive Insurance: In addition to the basic third party cover, this policy covers for Own Damage both for self and the vehicle inclusive of loss, theft, damage beyond repair and other acts of god. You can further enhance your cover by opting for add-ons to suit your preferences.
Premium Computation:
If you wish to work out an affordable premium, you must know the factors that determine the premium of your insurance whether for new purchase or renewal. The important determinants are:
Make and Model of the Car:
Volumetric Capacity of the engine.
Type of fuel used (Diesel, CNG, LPG Kits attracts higher premium)
Year of Purchase.
Place of Registration.
Cost of add-ons.
Insured Declared Value (IDV).
Ways to save on motor insurance:
Now that you are conversant with the basics of motor insurance, you can survey the market and find suitable plans like Reliance Car Insurance. There are ways that will help you lessen the burden of motor insurance if you judiciously work them out to your benefit.
Voluntary Deductible: By paying more for the mandatory deductible in the claim, you actually lower the premium amount, which pays in the long run.
Ignore meager claims: Do not claim small amounts as the impact on your No Claim Bonus will be affected by a bigger amount.
Transfer No Claim Bonus: Your accumulated NCB in the old vehicle can be transferred to your benefit while you purchase a new car.
Safety Devices: Installation of ARAI approved safety devices in your car over and above those in-built, will fetch you a discount on the own damage component of the premium.
Choose only what you need: There is a propensity to buy an array of add-ons that will substantially increase your premium. Go for features that are actually required and essential. If you can curb the urge to be fancy, it will definitely reduce the burden of your premium. Among the useful add-ons a few are that are worth taking are:
Zero Depreciation cover.
24/7 Road Side assistance.
Road Side Assistance: Most insurance plans extend this facility as an add-on. However, Reliance Car Insurance gives this facility for free.
AAI Membership: This is one membership you must take. Apart from the benefits that a member gets, you also earn a discount on the own damage component of your motor insurance.
Long Term Policies: Subsequent to SC directive, IRDAI has introduced long term motor insurance of 3 years for cars for all new purchases from 1st September 2018. Though the upfront payment is higher, it turns out cheaper in the long run as compared to annual policies.
Compare Plans Online: It is always useful to compare plans and multiple quotes to give you an opportunity to make an informed selection of the best and cheap motor insurance. This is possible only when you go online for purchase. The portal for Reliance Car Insurance is one such that can help you reduce the cost of your motor insurance.
Benefits of Online Purchase of Motor Insurance:
After having discussed and understood the ways to reduce premium to help make your car purchase cheaper, let us now see what online facility has to offer.:
Comfortable and user-friendly day and night navigation.
Allows comparison of plans and multiple instant quotes.
Direct interaction with the insurance provider.
Lower premium as savings on overheads and commissions are passed on to you.
Secure payment gateways with flexible modes.
Effective online assistance at the click of a mouse.
Bottom Line:
The various ways and means for reducing your motor insurance premium must not let you compromise on the cover. While understanding that cheapest is not always the best, an informed approach may help you reduce the cost of insurance. A judicious selection of plan and cover, especially the fine print for exclusion in relation to the cost may just be the ideal and cheapest motor insurance for you, thereby reducing the cost of owning a car.