Insurance Tips: Bringing a new car home on Diwali? Do your homework regarding insurance...
New Car on Diwali: The auto market is full of excitement on Diwali. Auto companies launch new cars at festivals like Dhanteras and Diwali. They also offer many discounts and offers. Usually, buyers look for the best deal in buying a car but ignore one important thing, motor insurance.
Experts believe that apart from being legally mandatory, motor insurance is important for the safety of your car. Saving on motor insurance premiums does not mean compromising on coverage. To reduce motor insurance premiums with comprehensive coverage for a new car, some things must be considered.
Compare policies online
Policybazaar.com Head (Motor Insurance) Paras Pasricha says that walking out of the showroom with a bundled car insurance deal seems easy and attractive, but you may have to pay a higher premium. If you compare policies online, you can find many options that fit your budget without compromising on coverage. Online platforms allow you to compare policies from multiple insurers, which can help you get better coverage at a lower premium.
Evaluate add-ons
Add-ons enhance the coverage of your motor insurance policy, but they also come at a small additional cost. One should carefully assess their needs before choosing them. This is because unnecessary add-ons can increase your premium without adding much value. Instead of choosing every available option, focus on those that are important for you and your car. For example, if you live in a heavy rainfall area like Chennai or Bangalore, add-ons like engine protection or consumables coverage may be essential as they can help you avoid huge repair costs in case of water damage.
'Pay as you drive' insurance is a better option.
Many offices are still continuing with work-from-home and hybrid models. So, if you are one of those who do not drive a car often, it may be beneficial to consider the "pay as you drive" (PAYD) model. During the pandemic, IRDAI introduced this under the sandbox scheme, which is a usage-based insurance scheme for your car. This model is ideal for people who drive very little.
Deductibles are an essential part of a motor insurance policy and directly impact your premium. The higher the voluntary deductible you opt for, the lower your premium will be. If you are a good driver and are less likely to make a claim, you can make more savings by opting for a higher deductible amount. However, keep in mind that a deductible of Rs 1,000 is mandatory for most cars, irrespective of the voluntary deductible amount you choose.
Benefit from no-claim bonus
Experts say that a no-claim bonus (NCB) is one of the most popular ways to reduce insurance costs. If you are buying a second car, you can transfer your NCB from the old car to the new car, ensuring more savings. Also, for every claim-free year, you accumulate a bonus that reduces your premium. For example, insurance companies usually offer a 20% discount after the first claim-free year, which can go up to 50% after five years. This is a huge saving, but it is important to maintain your NCB by avoiding claims for minor repairs and renewing your policy on time.