How to Save Money on Your Car Insurance Premium Every Year

What is a Car Insurance Premium?

A car insurance premium is the amount you pay to an insurance company to keep a car insurance policy active. You can view it as the cost of transferring risk to the insurer. If your car gets stolen or damaged in a road accident or a natural calamity, then the insurer will provide you with the relevant financial assistance to cover all incurred car damages or losses. 
 

Tips to Reduce Your Car Insurance Premium and Save Money

Every year, policyholders must pay a premium for car insurance renewal. Although this is an unavoidable recurring expense, you can still save money by reducing the premium. Here are some practical, timeless tips to reduce your digital car insurance premiums.

Compare Policies before Buying or Renewing

Not all insurance companies follow the same risk and pricing models. This is why premiums for the same car and coverage can vary from one insurer to another.
If you want to grab the best, most cost-effective policy, then compare similar policies from multiple insurers before finalising one. Just keep one suggestion in mind - never compromise on coverage to save money.

Pick Add-ons You Actually Need

When purchasing a comprehensive insurance policy, it can be tempting to add in riders that you think you might need. Since each add-on increases the premium, ensure you choose only the ones you really need. It will keep the car insurance premium to a minimum.

Install Approved Anti-Theft and Safety Devices

When you install certified anti-theft devices or additional safety features in your vehicle, you’re signalling to insurers that you care about your car’s safety.
Additionally, these installations lower the risk of theft and severe car damage. Considering these factors, some insurers might lower your premium.

Avoid Filing Claims for Tiny Damages

Car insurance policies are typically created to protect you against huge financial losses. Hence, if you start filing claims for minor damages, such as a minor scratch, insurers will increase your renewal premiums.
Covering minor damages from your own pocket is a wise option, as it also makes you eligible for No Claim Bonus (NCB). This bonus can boost your online car insurance savings at renewal time.

Maintain Safe and Clean Driving Records

Your driving behaviour determines your long-term insurance costs. Many insurers believe that drivers who avoid accidents and traffic violations are less likely to file claims.
Since a person’s driving history is evaluated before finalising the premium, your clean driving record can get you comparatively lower premiums.

Choose Higher Voluntary Deductible

A voluntary deductible refers to the portion of the claim amount that you agree to pay yourself if you file a claim.
When you choose a higher deductible, the insurer’s financial responsibility decreases, which is why they grant lower premiums. We recommend choosing an amount you can comfortably pay in the event of a major accident.
 

How to Calculate Car Insurance Premium Online

You can use any reliable online car insurance premium calculator to find near-accurate premium estimates. If you plan to purchase Car Insurance from Shriram General Insurance, then you should use the Shriram Car Insurance premium calculator.
To use this calculator, you’ll have to begin by entering your car number. You’ll also be asked the following details so the calculator can generate near-accurate premium estimates:

• Whether you want to buy or renew a policy
• Choosing the insurance type
• Entering the car details
• Providing your previous policy details (if any)
• Give contact details

Once you provide all the requested details and click submit, you’ll see the estimated premium amount.
 

What Affects Car Insurance Premium

Many factors affect digital car insurance premiums, but the following have the greatest influence.

Vehicle’s Insured Declared Value (IDV)

If you’re new to the term IDV, it refers to the approximate market value of your car at the time of purchasing the policy.
Since the IDV determines the maximum amount an insurer will pay if the car is stolen or completely damaged, a higher IDV results in a higher premium. Simply put, high-end cars will have high premiums and vice versa.

Driver’s Claim History and Insurance Record

Insurance companies will check your claim history before deciding on your car insurance renewal premium. If you’ve made frequent claims in the past, you’ll be viewed as risky and attract higher premiums. People with a claim-free record can save money on car insurance renewals.

Make, Model, and Engine Capacity

Different cars carry different levels of risk. Vehicles with powerful engines, expensive spare parts, and higher repair costs usually attract higher premiums. For example, luxury and performance cars will always carry higher premiums because their maintenance and replacement expenses are significantly higher.

Your Location

The location where you register your car also influences the premium amount. People living in dense cities usually navigate congested traffic and are more prone to accidents and theft. Hence, city residents usually pay higher premiums than those living in towns.

Coverage Type and Add-Ons

The policy type you select directly affects the premium. Third-party insurance typically has low premiums because it provides limited coverage. Conversely, comprehensive policies have higher premiums because they cover a wide range of risks. The add-ons you select also affect the premium, as each add-on costs extra money.
 

How Not Making a Claim Helps Lower Premium

One of the best tips for car insurance discounts is to maintain a claim-free record. Insurance companies reward drivers who don’t file claims during a policy year by giving them a No Claim Bonus (NCB). This bonus is essentially a discount applied to your premium during policy renewal.
If you continue to renew your policy on time without filing claims in subsequent years, the discount amount will continue to increase, helping you save money on car insurance renewals.
 

Car Insurance Renewal Process

The car insurance renewal process is very simple. If you have an existing policy, you’ll receive multiple renewal reminders from your insurer via email, SMS, and other notification platforms. You simply have to visit the insurance website, log in to your account, and make the payment for instant renewal.
 

How to Buy Car Insurance on Mobile Apps

Buying car insurance on mobile apps is very simple. Even if you’ve never purchased car insurance on a mobile app before, you can follow the step-by-step process listed below –

• Start by downloading the insurer’s mobile app. Android users can download the insurance app from the Google Play Store. If you’re an iPhone user, you can download it from the App Store.
• Create your account by providing your details. You’ll usually be asked for details, including your name, mobile number, and email ID.
• Find the ‘Car Insurance’ option from the app’s dashboard and browse available plans.
• You should also check the available add-on options if you want personalised coverage. We recommend choosing the plan and add-ons that fulfill your coverage requirements.
• Read the full policy terms and check the premium amount. Make the payment once you’re satisfied.

Your insurance policy will be created instantly once you complete all these steps. Since not all insurance apps are designed similarly or follow the same process, you might find slight variations when using some insurer-specific apps. However, the overall process will remain the same.
 

Final Thoughts

Every car owner wants to reduce their recurring car expenses, especially insurance premiums. While you cannot avoid paying insurance premiums, you can reduce them by following the car insurance discount tips covered in this blog.
Following these tips will help you save substantial money on your online car insurance. If you’re not satisfied with your existing car insurance policy and are exploring better options that provide enhanced coverage and wider add-on options, then you must explore the Car Insurance plans at Shriram General Insurance.
 

FAQs

1. Can my car insurance premium change every year?
Yes. Premiums usually change annually due to numerous factors, including vehicle depreciation, claim history, and changes in coverage. At times, the insurer may also increase premiums to tackle the rising inflation costs.

2. Does installing an anti-theft device reduce car premiums?
Yes, some insurers may provide lower premiums if you install certified anti-theft devices.

3. What is a No Claim Bonus (NCB)?
A No Claim Bonus (NCB) is the discount on premiums granted by insurance companies. You’ll receive it if you don’t file any claim requests in a given policy year.

4. How can I reduce my recurring car insurance premium?
You can lower your car insurance premium by driving safely, not filing claims for tiny damages, and avoiding purchasing add-ons that you don’t need.

5. Should I always look for the cheapest car insurance policy?
No, choosing the cheapest car insurance policy can cause more financial damage in the future. The best approach is to find a policy that provides good coverage at a decent premium.