Are you unsure about how to reduce your insurance premium? Remember, the premiums of your motor insurance policy are not fixed. You can purchase the best vehicle insurance policy without overshooting your premium budget. For the same, here are some tips to reduce your motor insurance premium. First, let us learn why the premium of your motor insurance policy becomes high:
Factors that Affect Motor Insurance Premiums:
The vehicle insurance premium is affected by many factors. All these factors help you to get to know the risk associated with your motor vehicle. The insurance premium gets high for vehicles that come under the high-risk category. Let us discuss the factors that affect the vehicle insurance premium:
Your Vehicle’s Age: The age of your vehicle as well determines its premium. The older the vehicle is, the more its chances of getting into trouble than new vehicles. Therefore, the premium of older motor vehicles is higher than the premium of newer vehicles.
Vehicle’s Make and Model: The premium of high-end and luxury cars is higher than the premium of normal medium-range cars. In the same manner, for commercial vehicles and other vehicles, the premium varies with your vehicle’s make and model. So, you and your friend may have purchased a car at the same time and the almost same price, but the car insurance premium of both cars may vary.
Type of Vehicle Insurance: The type of vehicle insurance and the riders that you have selected also decides the premium of your vehicle insurance policy. Moreover, if you opt for a third-party motor insurance plan, then the premium of your policy will be lesser if you take comprehensive motor insurance for your vehicle.
Claim History: Those who have poor motor insurance claim history are considered a greater liability by the motor insurance providers than those who have accumulated a No Claim Bonus for not claiming insurance. Therefore, the claim history also affects the motor insurance premium.
Tips to Reduce Motor Insurance Premiums:
Here are the top tips to reduce motor insurance premiums:
Increase Your Deductibles: You can reduce the premium of your auto insurance policy by increasing the deductibles. It is the component that you pay from your pocket when you make a motor insurance claim. However, keep the deductible as much as you can afford. If you make the portion of deductible too much, then the purpose of buying insurance will be defeated.
Avoid Claiming Small Sums: Try not to raise a motor insurance claim until it is essential. This is because when you make small-small claims, you lose the advantage of the No Claim Bonus. For example, a broken tail light of your vehicle can easily be repaired by a local mechanic and not claiming insurance in such a case will accumulate NCB for you.
Transfer Your No Claim Bonus: The NCB or No Claim Bonus is associated with a person, not with a vehicle, and no insurance agent will tell you this. If you sell your old car and purchase a new one, transfer your NCB and get a good discount on the insurance premium of your new vehicle.
Compare Different Insurance Plans: Do not go on anyone’s word of mouth, especially in the case of insurance. Compare and check various insurance plans by yourself. Various websites offer you the facility to compare different motor insurance plans online. A comparison will give you an idea of which insurance policy you must select as per your insurance requirements.
Install Anti-Theft Device: It is good to install safety features in your motor vehicle. Purchasing a steering lock, or gear lock, or installing an anti-theft device in your vehicle can give up to a 5% discount on your insurance premium.
Buy Third-Party Insurance for Old Vehicle: If your vehicle is more than five years old or you drive it rarely, then you can opt for third-party insurance for it. A third-party vehicle insurance plan is cheaper than a comprehensive motor insurance policy.
Avoid Unwanted Add-Ons: Add-ons or riders are additional benefits that you can add to your base comprehensive motor insurance plan to enhance its coverage. However, there are add-ons available for any second issue, but adding that will only increase your insurance premium. Therefore, be mindful while adding an add-on to your insurance plan.
Conclusion
Vehicle insurance is necessary for every vehicle owner. So, if you have a vehicle maintaining its insurance policy is required always. However, if you think that buying the best vehicle insurance policy is an expensive affair, you can follow the above-mentioned tips to reduce your vehicle insurance premium.
