5 sure-fire ways to bring down premium of your comprehensive car plan

Mr. Nikhil Singh, a Delhite, has lately bought a new car. Mr.Singh has been contemplating buying a car for a long time. Now he is on the verge of retirement and his sons are well-settled. So, he thought this is the best time to purchase a car to enjoy his life after retirement in style. He bought a gorgeous looking red 5 seater Maruti ALTO 800 that runs on petrol with a cubic capacity of 796.

 

Mr. Sharma is well-aware of the fact that he won’t be able to drive his new car as long as the car is not insured from the mandatory third-party liability. However, Mr. Sharma was not really thinking of only third party cover as he was also apprehensive of the well-being of his own car. Being a practical man he could foresee that any damage or loss to his own car will be difficult to afford as his retirement is imminent as well. That is why he chose to go for a comprehensive policy for his brand new Maruti Alto 800.

 

Being an internet savvy person he was aware of the existence of insurance comparison portals such GIBL that let prospective policy buyers compare policy quotes as per their requirement and buy the best policy from the portal itself. So, Mr. Sharma visited the portal of GIBL and submitted details of his car and his personal information.

 

He found 15 results as per his criteria, however, most of the policies were with one or two downsides. Mr. Singh found only 3 policies that look perfect in all aspects. Here are the top 3 comprehensive motor policy quotes for a 5 seater Maruti Alto 800 LX, Petrol with a cubic capacity of 796.

 

Insurer Premium Loading claims Free Pickup car Cashless statement Towing Reimbursement Bi-Fuel Coverage
Future Generali 11,837 YES YES YES

YES

YES
IIFCO-TOKIO 11,915 YES YES

YES

YES

YES
TATA AIG 14,331 YES YES YES YES YES

Source: GIBL

Although these policies have all the beneficial features, but Mr. Singh has found the premium amounts are a bit higher than his affordability. He was looking for ways to reduce the premium amount for the package plan for his plan.

Voluntary deduction

The voluntary deduction is a beneficial feature in motor insurance in India for those who want to have their premium reduced. This type of deductible amounts is determined by policy holders and they are supposed to pay that amount at the time of a claim. It is a sort of pact in which insured people agree to pay out a particular sum for every claim they make.


 

When Mr. Singh came across this avenue of reducing premium he used it to good effect. He decided to go for this type of deduction and compared premium amount after placing a voluntary deductible amount to see the difference in premiums. There are four options available for deductibles on the portal of GIBL. The higher one goes, the less will be one’s car insurance premium.

 

1

Source: GIBL

Mr. Singh opted for Rs. 5000 deductible amount keeping all other information same. He found the previous 3 insurers are in the top positions again with much- reduced premium amount. Here is the comparison of premium after opting for Rs. 5,000 as voluntary deduction.

 

Insurer Premium Loading claims Free Pickup car Cashless statement Towing Reimbursement Bi-Fuel Coverage
Future Generali 7847 YES YES YES

YES

YES
IIFCO-TOKIO 7434 YES YES

YES

YES

YES
TATA AIG 10341 YES YES YES YES YES

Source: GIBL

Now if he wanted to go for Future Generali vehicle insurance plan he could save as much as Rs 3990 (Rs. 11837 – Rs. 7847).In a nutshell, voluntary deduction helped Mr. Singh save around Rs. 4000 per year in his car insurance premium.

 

By opting for voluntary deduction Mr. Singh also has brighten his chances of getting No Claim Bonus as well. And, every claim-free policy year would have his premium amount even more reduced as well.

Additional ways to avail additional discount

After having reduced premium amount by opting for a voluntary deduction Mr. Singh kept on looking for other ways of minimizing the premium even more. One of his sons also has bought a car recently and he advised Mr. Singh to install IRAI approved anti-theft devices inside his brand new Maruti Alto 800. Mr. Singh was not aware of such devices so he did some research on the internet and came up with following information.

IRAI approved anti-theft devices help avail additional discount

Anti-theft devices are instruments that safeguard vehicles from being stolen. According to insurers policyholders that have installed anti-theft instruments in their cars are responsible. So, these car-owners receive concession on their comprehensive car insurance premium. As the number of vehicles with such devices installed increases, the number of claim decreases. Insurers gain more profit when there are less number of claims. That’s why they boost car-owners to fit such devices in their vehicles by offering them discount on premium.

 

Usually there is a 2.5% discount up to Rs. 500 on offer by insurers for installing ARAI approved protective devices. However, the installation must be validated by any one of the four Automobile Associations in India. There are some brands that are approved by ARAI such as AutoCop, Xenos and Nippon, however, policyholders should keep a close eye on these products to confirm that.

 

Mr. Singh installed anti-theft devices in his Maruti Alto 800 in order to decrease policy premiums. And, when he again started to compare policy quotes he did check the box for ‘discount for anti-theft device’. Finally, the quotes he received were even lessened than the previous amount. Here is a table of policy comparison when he opted for discount for anti-theft device.

 

Insurer Premium Loading claims Free Pickup car Cashless statement Towing Reimbursement Bi-Fuel Coverage
Future Generali 7597 YES YES YES

YES

YES
IIFCO-TOKIO 7273 YES YES

YES

YES

YES
TATA AIG 10091 YES YES YES YES YES

 

So, installation of anti-theft devices helped Mr.Singh save some more on premium. Now if he ant to avail the plan offered by Future Generali he can save another Rs. 250 (Rs. 7847 – Rs. 7597) from the already reduced amount.

 

In essence, Mr. Singh has managed to save significant amount of money in premium for the comprehensive policy for his car. Initially, the lowest premium was offered by Future Generali and the amount was Rs. 11,837. Now that figure has come down to Rs. 7,597. In total he saved Rs. 4,240(Rs. 11837 – Rs. 7597) which is not a negligible amount, especially for a person who is on the verge of retirement.

Is there any further way of lowering the premium amount?

Well, for Mr. Singh, maybe there is no other provision to decrease the premium amount. But, some others can lessen their premium amount even more. There are still 3 more ways to save on premiums.

Occupation of the insured people

If the policyholders are associated with those occupations that are specified by insurers they are entitled to get an additional discount on their vehicle policy premium. Government employees, teachers, military personnel, doctors and chartered accountants usually fall under this category.

 

2

Source: GIBL
Discount for members of Motor Asociation

Those who are members of any of the four recognized motor associations such as the Automobile Association of Upper India, Western India Automobile Association, Automobile Association of Eastern India and Automobile Association of Southern India are also entitled to a discount up to a maximum of Rs. 500. Insured people just have to submit the name of the association and Membership number along with the expiry date of their membership.

 

3

Source: GIBL

Discount for age and marital status and location

Yes, the marital status of the policyholder also comes into the consideration of insurers. People those who are married and aging between 32 and 60 are eligible for discounts as they are perceived as responsible drivers. Policyholders can submit their date of birth to see whether they qualify for discounts or not.

 

Location also plays a role in determining the premium amount for comprehensive vehicle insurance policy. As per The Indian Motor Tariff Act, all cities in India are classified in two separate zones.

 

Zone A consists of busiest cities like Ahmedabad, Chennai, Hyderabad, Bangalore, Mumbai, Kolkata, Pune and New Delhi which are more prone to accident. The rest of India comes under Zone B.

Conclusion

Motor insurance, particularly the third party liability insurance is a must in India, although it doesn’t cover the expenses for damages or losses to insure person’s vehicle is not covered under this plan. Therefore, policy buyers should look for comprehensive plans that provide coverage for both third party and policyholders. However, the premium rate for a comprehensive or package policy is higher than the premiums for a third-party cover. But there are many ways to reduce high premium rates.

 

Hopefully, the instance of Mr. Singh will help many other car-owners in India save on premium. Although Mr. Singh couldn’t avail all the possible ways, but some other owners of private cars in India surely will. Feel free to make comments and let us know about your experiences while calculating premiums for your comprehensive vehicle insurance plan.

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6 thoughts on “5 sure-fire ways to bring down premium of your comprehensive car plan

  1. Hello, thanks for such an elaborate post. I have a car and its renewal time is nearing. This time I want to go for comprehensive car policy and your post helped me gain a lot of vital information. I did make a comparison on GIBL motor insurance page and have secured a bunch of premium quotes. I want to know, since my car details are the same, why different insurance providers come up with different premium.

    1. We are happy that you found our post helpful. To answer your query, all insurance companies differ in three aspects; personal accident cover, discounts, IDV. This is why premium amounts vary from one insurance company to another.
      Discount: – Insurance firms offer discounts mainly on the basis of the claims made by policyholders. The discount is good when there is less claims and it gets worse as claims increase.
      Personal Accident cover: – Personal accident cover is an optional one where consumers decide the amount up to which they want the coverage. Therefore, coverage amount is variable and the final premium amount also doesn’t remain the same.
      IDV: – IDV is the most influencing factor when it comes to determining the premium. Many companies tend to reduce IDV in order to pay less at the time of a claim. You should try to keep the IDV of your car high as it will help you if you want to sell out your car and also at the time of getting a claim.

  2. Hello admin, I went through your blog thoroughly and learned some great ways of bringing down the premium. NCB is a good way of reducing premium, it seems. Can you please tell me how it is calculated?

    1. NCB or a No Claim Bonus is available when policyholders don’t make any claim on their vehicles. This discount is calculated as below: –
      1st year – 0% discount in premium amount (Own Damage)
      2nd year – 20% discount in premium amount (Own Damage)
      3rd year – 25% discount in premium amount (Own Damage)
      4th year – 35% discount in premium amount (Own Damage)
      5th year – 45% discount in premium amount (Own Damage)
      6th year – 50% discount in premium amount (Own Damage)

  3. Hello admin, your post on comprehensive car insurance is very illustrative. I have a car which is now 1 year old and according to my insurer, depreciation value of my car is likely to be determined in coming renewal. . I am little confused about the calculation of depreciation. Can you please help me out in assessing the depreciation on metal parts?

    1. Depreciation is the cost that arises due to the wear and tear of assets of a car when a car is aging . Depreciation on metal parts of the vehicle is determined as per the age of the motor such as;
      0% depreciation for 0 to 6th months
      5% depreciation for 7th month to 1st year
      10% depreciation for 1st year to 2nd year
      15% depreciation for 2nd year to 3rd year
      25% depreciation for 3rd year to 4th year
      35% depreciation for 4th year to 5th year
      40% depreciation for 5th year to 10th year
      50% depreciation for More than 10 year

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