There are complaints that insurance policies for cars and bikes come with high premiums. Even as the premiums charged on third-party insurance policies as per the Motor Vehicles Act are alike because the rates have been fixed legally, there are ways to rein in comprehensive policy premiums.
Exclude small claims
No-claim bonus, a fixed percentage of money earned for not making a claim in a year, will be deducted from the premium when a comprehensive policy is renewed in the following year. Though the deductions will be 20 per cent in the first year, 25 per cent in the second year and, likewise, 50 per cent from the sixth year, if there is any claim in any year, there will be no deduction in premium in the following year. Hence, if no insurance claim is made for minor repairs, the no-claim bonus will be given continuously, lowering the premium while renewing a policy. Claim insurance only when the cost of repair is more than the no-claim bonus. Owners of new vehicles must consider the no-claim bonus in the next two years before deciding to put in a claim.
Renew on time
Though three-year policies can be taken for two-wheelers, only one-year policies are allowed for cars. The cost of policies will rise if they are not renewed on time. Not only that no insurance will be paid if a claim is made on an outdated policy, the no-claim bonus due till then will be lost completely if the renewal is delayed by more than 90 days. Moreover, insurance cover will be renewed only after the vehicle is surveyed and certified to be faultless. The policy owner will have to bear the additional cost of the survey.
Add-on cover
Like the riders on critical illness in life insurance policies, many companies provide add-on covers with vehicle insurance policies. There is an add-on cover to prevent the loss of no-claim bonus up to 50 per cent of the premium accrued over the years by using the vehicle carefully and not making any claim with one claim. If NCB add-on cover is bought, even if there is a claim, the no-claim bonus accrued till then will be protected.
Transfer bonus to new policy
When a policy owner sells his old car, the no-claim bonus accrued till then can be saved. The basis for this is the concept that no-claim bonus is given to the policy owner and not to the car. When a new vehicle is bought, the premium of the new policy can be reduced by transferring the no-claim bonus due to the policy owner.
Safety features of the car
If safety systems have been fitted in a car to prevent people from stealing it, many companies deduct up to five per cent from the premium. Some companies even consider the colour of a car while calculating premium. Compared with black and red cars, premium for a white car will be less. Not only that, comprehensive policy premium can be reduced if the policy owner does not demand cover for certain parts or if he agrees to bear a higher share of the cost of the parts replaced during repair.
