5 Mistakes That Can Make Your Car Insurance Expensive

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5 Mistakes That Can Make Your Car Insurance Expensive

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In India, it is mandatory for you to have a valid insurance cover for your car. While the cost of car insurance is usually not very expensive, the rising rates of insurance premium among other factors may result in increasing the overall cost. If you too feel that you are somehow over-paying for your car insurance, don’t worry. If your premiums are high, you must check whether you are committing any of the below-mentioned mistakes and avoid them.

Buying Car Insurance Without Comparing

Buying Car Insurance Without Comparing.

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You would find that almost every reputable general insurance company offers a car insurance plan for your four-wheeler. Each plan features a unique combination of coverage benefits and premium rates. Therefore, before purchasing any plan, you need to make sure that you compare the available options and then choose the one that gives you the best premium rate.

By comparing plans from major car insurance companies, you can also select the desired coverage benefits. Therefore, if you are purchasing a car insurance policy without comparing, you are making a crucial mistake that could make your car insurance expensive.

Choosing A Higher IDV

Choosing A Higher IDV.

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In layman’s language, Insured Declared Value or IDV of your vehicle is the market value of your car after factoring in depreciation. Therefore, most car owners prefer having a high IDV as it helps ensure a higher claim settlement. In some cases, however, having a higher IDV isn’t beneficial for you. It merely makes your car insurance expensive.

For example, if you have a 10-year old car, which you are trying to replace soon, buying insurance that has the highest available IDV is an unwise decision. Instead, you should opt for a plan that offers a lower IDV for your vehicle, if you wish to save on premium.

Buying Too Many Add-ons

Buying Too Many Add-ons.

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Add-ons are crucial if you wish to enhance the scope of your car’s coverage. These additional features; however, increase your premium amount. So, while opting for add-ons, you need to avoid purchasing the unnecessary ones. For example, if you are residing in a flood-free area, you essentially may not require an engine protection add-on to protect the vehicle.

Similarly, if you already have a personal accident cover, you would only waste your money by buying similar add-ons. Instead, you must opt for add-ons such as zero depreciation cover or road-side assistance, which help you cover adequately for eventualities.

Not Opting for Discounts

Not Opting for Discounts.

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Reputable car insurance companies offer attractive discounts, in addition to no-claim bonuses, which help to reduce the premium of your car insurance. For example, if you have an existing membership of a recognised automobile association, you can avail discounts up to 5 percent on the premium.

Also, you can get concessions up to 2.5 percent by installing safety and anti-theft devices that are approved by the Automobile Research Association of India (ARAI). If you have an excellent sheet of claims-free riding, you can further reduce your premium by opting for a voluntary deductible amount higher than the compulsory deductible.

Lapsing Your Policy

5 Mistakes That Can Make Your Car Insurance Expensive

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Most car insurance plans are annually renewable. Therefore, if your existing car insurance policy lapses after a year, you would have to pay a higher premium amount for any subsequent renewals. Given the fact that you are legally obligated to purchase car insurance, you cannot commit the error of not renewing your policy on time. If the policy renewal is not done within 90 days of its expiry, you may also lose out on the accumulated no-claim bonus and pay more premium than you should.

Concluding,

While buying car insurance is not optional, it is indeed not expensive. However, many of us end up paying a higher premium than we should otherwise. There could be several reasons for this anomaly. For example, you could’ve purchased way too many add-ons with your insurance policy or didn’t compare the different plans before buying coverage in the first place.

Overall, you need to be judicious in your approach while purchasing car insurance and make sure that you understand every aspect of the policy document before signing on the dotted line.

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