Are you wondering why your car insurance policy premium is high? There could be many factors contributing to a rise in the premium amount. So, we have brought to you a thorough checklist of the mistakes that you may have made that led to increase in the car insurance premiums.
- Not Comparing Policies before Purchasing Car insurance plans may differ in terms of premium rates, coverage features, and coverage benefits. To get the ideal premium rate, you must compare plans and then buy later. Purchasing the very first policy you come across can be an unwise decision. It may neither suit your interests nor be pocket-friendly. Thus always compare policies before buying one.
- Add-ons You Do Not Need You may get an option to select add-ons on your vehicle insurance, which enhances the scope of coverage, but it will also raise the premium cost. When choosing add-ons, you must leave out the unnecessary ones to avoid adding on to expenses. For instance, if you reside in an area that is not susceptible to floods, then opting for an engine protect ride is not feasible.
- Choosing an Unsuitable Policy There are two variants in vehicle insurances – comprehensive and liability plans. Comprehensive plans have a more inclusive coverage, but not a great option if you do not use your car much. If you use our car minimally, you can choose cheaper car insurance, with a third-party liability cover, which will also offer compensation for legal liability.
- Forgetting to Check for Discounts When purchasing a policy, you may come across a few discounts and offers, but to save time you may just skip those and continue with the purchase. Here, you may be committing a grave mistake. You should always look for discounts, and if these are ones you can use, then your car insurance premium can be lowered significantly.
- Selecting a Higher IDV IDV (Insured Declared Value) of a car is its market value considering the depreciation rate. People prefer a high IDV because it ensures them a higher claim settlement. But a high IDV also makes a car insurance policy expensive, especially if you have an old car that you want soon replace. For an old car, lower IDV is better and can save on premium cost.
- Unutilized No Claim Bonus (NCB) If you have not made a claim in any policy year, then your car insurance can provide NCB discount. This discount increases on every claim-free year. Thus, when you have to renew the policy, apply the NCB discount and reduce the premium amount.
- A Bad Driving Record If you have a bad driving history, like reckless or drunken driving, speeding up, driving without license or not carrying the necessary documentation, etc, then chances of a higher premium, is greater. This is done to hedge the cost of multiple claims made on the insurer, so the company may raise renewal premium for policyholders that have a bad driving record.
So, to keep the car insurance cost to the minimum, you must adhere to the above-mentioned pointers. Also, if you reduce the liability of the insurance-provider, you stand a better chance of getting discounts. For instance, you must renew the policy in time and stop making trivial claims.