As per the Automobile Law, some countries (such as India) require all car owners to have auto insurance. While auto insurance coverage is mandatory, the premium can vary from time to time. For example, if you are purchasing a policy for a specific premium, it may not be the same for the next year. There are many factors that affect the insurance premium like: Declared Insurance Value (IDV) of the vehicle, No Claims Bonus (NCB), add-ons, etc. For this reason, most people pay a higher premium when renewing their insurance policies.
To avoid paying an extra premium, there are some normal things to keep in mind, although all insurance companies have a special process for calculating premiums for the insured’s auto insurance policies.
If you want to renew your car insurance policy, you can reduce the insurance premium as follows:
Consider additional modules (required or not)
If you have any add-ons related to your primary insurance, you will receive comprehensive coverage. For example, the vehicle (s) policies add-on, such as no depreciation and engine safety, will help you avoid paying a higher premium in the long run, and will also cover such damages and keep you safe. Remember, additions increase your premium costs instantly when added to your regular engine coverage. Think about it according to the professionals and call according to your needs while choosing this additional coverage.
Try everything you can to avoid canceling the policy
You can avoid the insurance policy expiring by paying your premiums on time. If the insured misses their last renewal date, law enforcement companies generally inspect the vehicle. After that, insurance companies usually charge a higher premium through this screening. Therefore, professionals believe that it is better to avoid the expiration of car insurance. Moreover, policy holders forfeit the BCN in full if the insurance payment is due more than 90 days.
Please note the No Claim Bonus (NCB):
The insurance company offers the premium without claims to policyholders after they have not submitted any claims under the main policy. The BCN is generally raised to 50% for a 5-year period without losses, although this varies from company to company. In the event that the policyholder files a claim, the premium will be reset to zero without claiming, resulting in a higher premium. Therefore, you must drive carefully to avoid making a claim.
Declared Insurance Value (IDV)
Depending on the age of the vehicle, the insurance company will decide the exact insurance value at the time of renewal. The IDV is calculated according to the age (years) of the vehicle’s use and the depreciation applied to the previous exhibition price of the vehicles (cars, bikes, etc.) up to 5. For older vehicles, the market price is used as the IDV used on these vehicles. Therefore, try to determine the appropriate “car value” for which the insurance policy was purchased.