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8 ways to lower premium rates while buying a car insurance policy

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Car insurance can be very expensive, until consumers know the way to reduce costs.

8 ways to lower premium rates while buying a car insurance policy
Car insurance can be expensive, but there are ways consumers can lower premium rates. While it is advisable to compare car insurance quotes online using a trustworthy insurance web aggregator -- to get best options available at affordable prices -- there are other ways too that can help a consumer save some money.
Here are a few tips to lower premium rates while opting for a car insurance policy:
Look for benefits
There are different discounts that an insurer offers policyholders. These discounts are based on the insured person's profession, driving record, age and certain other factors.
"Hence, users should check with the insurer about various discounts they are eligible for," suggests Rakesh Goyal, Director Probus Insurance, Insurtech Broking Company.
Check location
According to Goyal, the  location too has an impact on the premium rates of the policy. If an individual is located in an accident-prone area, there is a high chance of the need to pay comparatively higher premiums. Under this case, one can look out for various options by comparing quotes online.
Voluntary deductibles
One can reduce the car insurance premium rates by increasing deductibles. If the deductibles are very low, then the premium rates of the policy would be higher.
"A high voluntary deductible is, however, recommended for someone who has not made any claims in the past few years or someone who has excellent driving skills (lower would be the chance of accident under such case)," Goyal explains.
Set up safety device
Installing anti-theft devices is suggested as these devices not only ensure the safety of the vehicle, but help bring the annual premium cost lower. Having a membership with Automative Research Association of India (ARAI) makes the consumer eligible for further discounts on premiums.
Avoid excessive modifications
According to Goyal, it is recommended to avoid making any modifications to the car that can lead to higher premium rates. Adding spoilers, ultrasonic sensors, gadgets, etc should be avoided to keep the premiums on the lower end.
"Do not forget to inform the insurer if any modifications are made. If not informed on time, user might face unpleasant surprises during the claim, or in some cases, the insurer might even invalidate the policy," Goyal advices.
No Claim Bonus from old to new
Consumers can transfer their accumulated NCB to the new car purchased because the auto insurance is linked with the insured and specific to the car. Even after selling the old vehicle, one can ask the insurer to provide them with a no-claim certificate.
Users can then transfer the existing policy to the new car and carry forward the bonus. This will help in lowering the premium amount of the new policy for the new car.
Choose the right Insured Declared Value (IDV)
IDV is the amount the car is insured for and forms the basis of all settlements in the event the car is stolen or damaged beyond repair in an accident.
According to Naval Goel, CEO and Founder of PolicyX, a lower IDV demands a lower premium. However, it must be computed wisely, since IDV is the utmost value the insurer can compensate with.
Select add-ons wisely
"One should select add-ons based on the need and also the condition of the car," says Adarsh Agarwal, Appointed Actuary at Digit Insurance.
"For instance, if somebody has a car which is over 3 years old, a zero depreciation add might not be too necessary but for a new car it is a must. Hence with such decisions one can opt for a comprehensive insurance cover without too much of a pocket pinch," he suggests.
Disclaimer: CNBCTV18.com advises users to check with certified experts before taking any investment decisions.
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