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10 ways to save car insurance renewal cost

Team AckoOct 4, 2021

Car insurance is not just a mandatory requirement but it also acts as a financial backup against unexpected accidental damages to your vehicle or third-party liabilities. Often, the car insurance policy comes with a 1-year tenure, after which you need to renew it. To renew the plan, you have to pay the renewal premium to continue to enjoy the benefits of the coverage. 

However, while renewing, you probably may want to save more money while enjoying the same benefits. So, if you are anything like us and hate to pay more than what is required, here are a few effective (by the way, did we tell you tried and tested before) ways to save the car insurance renewal cost.

6 Ways to Save Your Money on Car Insurance Renewal

1. Know your requirements before renewing your car insurance

Several of us believe, especially those new to car insurance, that we can purchase insurance policies without much analysis about the type of insurance plan that suits our requirements. Before buying a car insurance plan, you need to list your requirements and settle on a plan that suits your needs. 

This way, you can avoid buying insurance policies that offer coverage that you actually don’t need. And if you may want to further enhance your plan, consider opting for add-ons. Add-ons are smaller covers that provide financial support against specific damages or losses. 

2. Go online

The online or the digital platform lets you renew your car insurance policy within a few minutes. You don’t have to fill in exhaustive forms or submit physical documents to renew the policy. Digital-first insurers such as ACKO offer insurance only through the online platform. Even renewal of the policy can be done without visiting a branch or through an insurance agent.

ACKO follows a direct-to-customer mode; hence, you can buy, renew and raise claims online. With no middlemen and digital infrastructure, we are able to pass on the savings to you in the form of low-cost car insurance policies. This way, you have access to affordable insurance plans along with a hassle-free experience.

3. Make use of NCB

No Claim Bonus (NCB) can go up to 50% if you don’t submit any claims for five consecutive years. Avoid raising claims for minor damages since it impacts the NCB. It is recommended to raise claims for damages where repair costs exceed the NCB discount. You can use the NCB to save money on the car insurance renewal premium.

4. Opt for a multi-year car insurance policy

One of the ideal ways to reduce your car insurance renewal premium rate is to opt for a multi-year insurance policy. You can opt for the 3-year long-term insurance policy with ACKO to enjoy additional discounts on the renewal premium rate.

5. Compare policies

There are several car insurance policies in the market, and each has a unique premium rate. To find the lowest premium rate and reduce the renewal premium, you must compare the policies based on the benefits and features that they bring with them. With the digital revolution, you can compare car insurance policies within a few minutes using the online platform. 

You can compare different plans online at your convenience instead of depending on different agents or visiting various insurance company offices. Choose the plan that offers the highest coverage at a lower car insurance renewal premium without compromising on the services.

6. Choose the appropriate Insured Declared Value (IDV)

When you insure your car with a Comprehensive Insurance plan, it is vital that you set the right IDV. It is the approximate market value of your car. This is the maximum amount that is payable during claims. 

Hence, choose the correct IDV. Please note that setting a higher IDV leads to a higher premium rate and higher claim settlement amount. On the other hand, setting lower IDV results in a lower premium and claim amount in case of total loss or theft.

7. Don’t let the policy lapse

It is imperative to renew your car insurance policy within the expiry date. If your policy lapses, then the insurer will not offer any discount or additional benefits at the time of renewing the plan. Also, if you don’t renew the plan within 90 days from the date of expiry, you will lose the No Claim Bonus (NCB) that you receive for not filing claims during the policy tenure.

8. Choose a voluntary deductible

Every car insurance plan has a mandatory deductible and an optional (voluntary) deductible. You can opt for the voluntary deductible to reduce the premium rate while renewing your car insurance plan. Since you opt to bear a certain percentage (voluntary deductible) of the claim amount, the claim settlement amount and even the premium amount reduces.

9. Hunt for discounts

Look out for deals that can reduce your car insurance renewal premium. Look out for discounts during festivals or special events. You may have to do some research; however, a discount on renewal premium certainly helps you save money.

10. Secure your car

You can get an additional discount on the car insurance renewal premium if you secure your car with an anti-theft device approved by the Automobile Research Association of India (ARAI). Since you are trying to reduce liabilities such as thefts, you may receive discounts on the renewal premium.

In a nutshell

Your car requires a well-balanced insurance plan that suits your needs. Use these tips to scrutinise different plans in the market and get the right insurance plan for your car at a price that is easy on your pocket. Read the terms and conditions of the policy and remember to renew your car insurance policy before it expires.

Frequently asked questions

Here are some commonly asked questions about the car insurance renewal cost.

What is the ideal time to renew car insurance?

It is a good practice to renew your car insurance plan 15 to 20 days before the policy renewal date. This way, you ensure the continuity of the coverage and enjoy the benefits of any additional discounts.

Can I switch to a new insurer while renewing my car insurance?

Yes, you can switch to a new insurer while renewing the insurance policy for your car. You may get better or low-cost insurance renewal premium rates from the new insurer, and it is not mandatory that you need to stay with your existing insurer.

Will modifications to my car affect my car insurance renewal premium?

Avoid modifying your car that may hamper the use of safety features such as airbags. All banned or unauthorised modifications to your car may result in the rejection of your claims. Additionally, your car insurance renewal premium rate may increase since the cost of repairing such parts is higher.

Is it advisable to raise claims for minor damages?

One of the most significant setbacks of raising a claim during the policy period is the loss of the No Claim Bonus. If you wish to save on the renewal cost, you must avoid raising claims for minor damages to prevent the loss of the NCB discount.

Is renewing car insurance online safe?

Yes, it is completely safe. Insurers such as ACKO are licenced by the Insurance Regulatory and Development Authority of India (IRDAI), to sell car insurance policies in India.

How is car insurance renewal premium calculated?

Your car insurance premium rate is primarily based on the IDV, model, engine cubic capacity, year of manufacture and location. You can use the car insurance premium calculator to understand the renewal cost of your car insurance.

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